Stocks seen to rise

LOCAL stocks are seen to trade with further upside bias this week following last week’s rebound out of “bear” territory.

Last week, the Philippine Stock Exchange index (PSEi) gained 7.72 percent to close on Friday at 6,687.62, lifted by the country’s better-than-expected fourth-quarter economic growth and the Bank of Japan’s surprise stimulus move.

“We see potential rallies to 6,730 (50-day moving average) this week but the index is close to overbought conditions so there might be moderate corrections to around 6,450-6,400,” said Luis Gerardo Limlingan, managing director at Regina Capital.

“These moves are crucial because this will dictate index move for February. Right now we’re still not too bullish on the market but it is gearing up for a key reversal, which I think will happen in March,” Limlingan said.

Following last week’s rebound, the PSEi has pared losses from the historical peak in April 2015 to 17.7 percent.

Jonathan Ravelas, chief strategist at Banco de Oro Unibank, said the country’s fourth-quarter gross domestic product (GDP) growth rate of 6.3 percent year-on-year exceeded consensus estimates by 40 basis points but was in line with BDO’s expectations.

“The month’s close at 6,687.62 highlights a near-term bottom at 6,048.28, encouraging a test of the 6,800 levels in the near term,” Ravelas said.

“A break of 6,800 could try 7,000 levels. However, a failure to test the 6,800 level could call a retest of the low,” he said. Doris Dumlao-Abadilla