Sluggish trading seen

MANILA, Philippines—The local stock market may post losses this week on concerns over the US and European economies, but the upcoming third-quarter earnings season and continued bargain hunting for still-undervalued shares may provide some support.

The Philippine Stock Exchange Index (PSEi) rode a six-day rally last week to close at 4,153.40 on Friday, up 3.6 percent from the week before.

Trading volume on Friday was a modest 2.9 billion shares worth P3.5 billion with 79 stocks advancing, 59 declining and 41 others closing unchanged

“The local composite index emerged unbeaten as it capped the week with a 144-point gain. The index’s successive days of gains are a sharp but welcome recovery from the heavy selldown seen last month,” brokerage firm AB Capital Online said.

The local index bucked the trend in the region as most Asian benchmarks snapped up their bull run on Friday.

The rally was supported by the “bounce-back of stocks which have been oversold and undervalued,” such as ICTSI, Semirara and Philex. The government’s announcement of a stimulus plan to ramp up spending in the remaining months of the year also helped fuel investors’ risk appetite earlier in the week.

This week, the brokerage firm said investors would likely take their cue from developments abroad, particularly the ongoing debt woes in Europe and economic developments in the United States.

It noted that despite the good performance for the week, investors remained cautious and the index’s gains were still muted. “Clearly, even if fundamentals turned attractive, the overall volatility caused by external factors added weight to the worries of the market,” the company said.—Paolo G. Montecillo