Philippine stocks expected to climb anew

The local stock index may resume its climb and even retest recent highs this week on the back of some fund realignment and window-dressing activities, stock experts said.

Last week, the main-share Philippine Stock Exchange index gave up 103.45 points, or 2 percent, to finish at 5,042.44 on Friday. A new intraday high of 5,146.17 points was recorded last Monday, but the index had since pulled back due to renewed concerns on global growth.

Paul Joseph Garcia of the Bank of the Philippine Islands and Odyssey Funds, said the PSEi may retest the recent record level and end closer to 5,150 this week.

Garcia said there was an upside coming from large institutional investors increasing their allocation to equities after locking up profits from fixed income assets, which outperformed last year.

“There’s a rebalancing of portfolio acceleration leading to further rerating of equity markets,” Garcia said, adding that investors were willing to accept higher valuations. “They are banking on upward revision on earnings due to better-than-expected growth.”

Joseph Roxas of Eagle Equities Inc. said the market could trade “sideways to a little higher,” but noted that volume could turn lighter ahead of the long Lenten break.

“Foreign activity seems to be slowing down too, but the trend is still upwards,” he said.

Online stock brokerage Yapster e-Trade Inc. (www.2tradeasia.com) said relatively lighter sessions could be visible this week, as players would want to stay liquid ahead of the upcoming Lenten break.

“Most foreign investors might also check for policy clues in China, specifically over talks on the possibility of a reserve requirement cut in early April to support extra lending. Overall, we view this lull as windows to gradually position in counters that will benefit from increased investments this year,” it said.

Having surged by about 17 percent since the start of the year, the PSEi, according to 2TradeAsia.com, might consolidate above the 5,000 zone for now as some players revalidate possibilities for earnings upgrade with indicative first-quarter results. Immediate support was seen at 5,000 and resistance at 5,100- 5,150.—Doris C. Dumlao