After breaking key barriers past 7,000 last week, the local stock market is expected to trade with optimism again this week as mobility restrictions have been relaxed in Metro Manila.
Last week, the main-share Philippine Stock Exchange index (PSEi) racked up 306.6 points, or 4.44 percent, to close at a nine-month high of 7,213.46.
With local COVID-19 numbers improving, the PSEi has reversed losses seen for most of the year and is now up 73.75 points, or about 1 percent, from its end-2020 closing of 7,139.71.
BDO Unibank chief strategist Jonathan Ravelas said investors were “becoming more optimistic on a combination of upbeat regional sentiment and prospects of further economic reopening as COVID-19 infections decline.”
More business establishments were allowed to open and lockdown curbs relaxed beginning Oct. 16. The National Capital Region was placed under alert level 3 up to Oct. 31. The metro was previously under a stricter alert level 4.
“The week’s close at 7,213.46 highlights the market is gaining momentum as it broke above the 7,150 resistance level,” Ravelas said.
“Should this condition persist, it might try the 7,400 levels in the near-term,” he said.
Ravelas said it would be crucial to see if the market could keep itself above 7,150. Failure to do so could induce some profit-taking, he said.
Across the world, lockdown restrictions have been easing with COVID-19 vaccination rates rising.
This week, some of market liquidity may go to the P4.53-billion initial public offering of Villar-led grocery chain operator AllDay Marts Inc.
AllDay is offering up to 6.86 billion primary shares and up to 685.71 million overallotment option shares at 60 centavos per share. The offering will run from Oct. 18 to 25, while listing on the main board of the PSE will be on Nov. 3.