LOCAL stocks are seen to continue their upward bias this week alongside fresh monetary stimuli in Europe and efforts by China to address economic concerns.
The main-share Philippine Stock Exchange index (PSEi) gained 2.88 percent to close on Friday at a four-month high of 7,098.08. The 7,100 mark was tested in intra-day trade on Friday.
“The bulls are winning round 1 but this is just round 1. China remains a risk to emerging markets,” said Michaelangelo Oyson, president of BPI Securities.
Further ascent was possible as China tries to stabilize the yuan, Oyson said. “It could still run because China is coming with measures to push the can down the road,” he said.
But Oyson added: “I am still cautious on the market. This is just a trading window.”
Oyson said the market would likely be eventually capped by US Federal Reserve Chair Janet Yellen’s call to raise interest rates. While monetary policies were supportive in the past, he suggested that markets would remain vulnerable once the US sanctions another round of interest rate increases.
“So far, the rally has been supported by domestic investors. Foreign investors have stayed largely in the sidelines. With the current high valuations, the Philippines doesn’t look as attractive as other markets,” he said. Doris Dumlao-Abadilla