The local stock barometer is seen to sustain its rally and possibly retest the 8,300 level in the near term.
Last week, the Philippine Stock Exchange index (PSEi) rose by 100.42 points or 1.2 percent to close on Friday at 8,281.27, probing new highs. The index has gained for three consecutive weeks.
BDO Unibank chief strategist Jonathan Ravelas said the recent rally was underpinned by optimism that the Philippine tax reform package would be passed by the Senate. A new intraday high was hit at 8,321.81 last week.
“Chartwise, the week’s close at 8,281.27 highlights the market has the momentum to sustain the rally above 8,000,” Ravelas said. “Look to see a retest of the 8,300 levels.”
Since the start of the year, the PSEi has gained by 21.06 percent.
Last week, the counter for holding firms—deemed as a proxy to the economy—rose by 2.6 percent while the underperformers were the services (-1 percent) and mining/oil (-0.94 percent) counters.
The recent rally was also supported by buoyant risk appetite among foreign investors. Last week, net foreign buying amounted to P607.12 million, bringing total net foreign buying since the start of the year to P29.69 billion.
Ravelas said foreign inflows to the local stock market had also helped shore up the peso last week by 0.86 percent to 50.725 against the dollar. This was despite the boost to the greenback after US Federal Reserve officials signaled to begin balance sheet normalization and maintained forecasts to raise interest rates again this year.