Stocks seen to rise

LOCAL stocks are seen trading with an upside bias this week as positive offshore developments are seen encouraging bargain-hunting.

Last week, the main-share Philippine Stock Exchange index (PSEi) gained 2.07 percent to close on Friday at 6,792.06.

Joseph Roxas, president of Eagle Equities Inc., said the local market was drawing strength from the relative resilience of Wall Street, expectations that the US Federal Reserve would not rush to raise interest rates further, the rebound in oil prices and signal from China that the yuan would not be sharply devalued further.

“At the same time, the market has gone down far enough, so there are a lot of bargains,” Roxas said, adding that the PSEi might gain another 100 basis points this week.

Roxas said he doubted whether the local stock barometer would go back to the all-time high level anytime soon, adding that the surge to such level was due to investors’ excesses.

The PSEi closed at an all-time high of 8,127 in April last year.

“I actually think there must be a correction first, but because everyone is waiting for a correction, it’s not happening. Every time there’s a dip, investors immediately come in,” he said.

Jonathan Ravelas, chief strategist at Banco de Oro Unibank, said investor sentiment improved last week due to rising oil prices and a strong recovery in Wall Street stocks, causing the PSEi to hit an intra-week high of 6,848.87 before some profit-taking at the end of the week.

“Chartwise, the week’s close at 6792.06 encourages further tests toward the 7,000 levels in the near-term,” Ravelas said. Doris Dumlao-Abadilla