Local stocks seen to retest 8,000 level
The Philippine Stock Exchange Index (PSEi) saw strong gains for the week as investors cheered the prospect of further rate cuts that were signaled by the Bangko Sentral ng Pilipinas.
The PSEi surged almost 2.9 percent week-on-week to 7,970.02. It went up 1.7 percent on Friday alone.
Analysts said the run-up put the PSEi on track to again retest the 8,000 level and possibly beyond.
Jonathan Ravelas, BDO Unibank Inc. chief strategist, is taking a more sober view. He said in an interview that the PSEi’s movement was consistent with a consolidation pattern between 7,500 and 8,000 level.
“So the key question now is, will the rally be sustainable above 8,000?” Ravelas said.
He explained that investors were starting to price in possible rate cuts. But this alone may not be enough for the PSEi to climb beyond its consolidation pattern.
“The other thing that can sustain the market is that the government actually spends,” Ravelas said. The budget impasse early this year crimped spending and, subsequently, economic growth, the Department of Finance said.
