Local stocks are seen remaining on consolidation mode this week as investors balance the positive credit outlook for the Philippines with lingering uncertainties in the eurozone.
Last week, the main-share Philippine Stock Exchange index added 12.44 points to finish at 4,304.94.
“The market has been bobbing within a 50-point range since Dec. 1 which reflects the market’s unease regarding the eurozone’s crumbling situation. That said, markets in the Asian region should benefit from increasing inflows given improving sovereign outlooks,” said PNB Securities deputy chief Manuel Lisbona.
Last week, global credit watcher Standard & Poor’s changed its credit outlook on the Philippines to “positive” from “stable.” The rating currently stands at two notches below investment grade.
S&P also upgraded Indonesian sovereign credit to investment grade last week.
Lisbona said there was a 50-percent chance that the market would swing either positively or negatively this week. “The odds are better by yearend, with around 65-70 percent chance of rally.”—Doris C. Dumlao