The local stock barometer is seen to trade with an upside bias this week—the first week under the Lunar Year of the Fire Rooster—as investors welcome indications of improving bilateral relations between the Philippines and the US.
Last week, the main-share Philippine Stock Exchange index (PSEi) gained 101.01 points or 1.4 percent to close on Friday at 7,333.67.
Veteran stockbroker Joseph Roxas, president of Eagle Equities Inc., said the market would benefit from the announcement that the Philippines’ Enhanced Defense Cooperation Agreement (Edca) was still on. “Implication is we’re back to normal relations with US.”
President Duterte earlier threatened to sever military and economic ties with the US following American criticisms on human rights violations linked to his all-out war against drugs, but recently, reports pointed to the US building military facilities this year as part of the 2014 military pact.
Edca is an agreement between the Philippines and the US that is envisioned to advance the implementation of the PH-US Mutual Defense Treaty.
This week, Roxas said the PSEi might muster enough strength to retest the 7,500 level.
Local stockbrokerage AB Capital Securities said this week, the index might continue to consolidate within the 7,093-7,331 range.
“We can continue to expect the 7,400 level to pose as a strong resistance, though the release of corporate earnings starting next month could be the catalyst for our market to breach this level,” the brokerage said.