Philippine stocks seen to consolidate this week

MANILA, Philippines—The local stock market is seen consolidating this week in the absence of fresh incentives for investors to load up equities aggressively.

Last week, the main-share Philippine Stock Exchange index added 3.84 percent, or 189.44 points, to close at 5,120.07 on Friday as markets were relieved that Greece voted to retain the austerity measures needed for the debt-strapped country to avail itself of a bailout package and stay within the eurozone.

“The market is still moving between 4,920 and 5,160 and is currently within striking distance of resistance,” said Manny Lisbona, deputy chief at PNB Securities. “Considering the dearth of positive economic data, I don’t expect the market to break through 5,160.” Our (Philippines) strong fundamentals will also prevent us from breaking below 4,920.”

Toward the end of last week, the US Federal Reserve’s “Operation Twist” was disappointing to the markets, which were looking forward to a more aggressive monetary easing. Another dampening development was the downgrade by Moody’s Investor Service of 15 of the world’s biggest banks.

In the local market, among the new developments being awaited is the release of a new national mining framework by Malacañang.

AB Capital Securities said new government policies targeting the country’s important sectors such as the Mining Act would attract investment plays and serve as the catalyst in the local market. “With the release of the new mining policy, not only will local government units, environmentalists, and mining companies benefit, but the local issues as well,” it said.

BPI Securities said this week the local market’s performance would depend on the performance of US and European markets given the downgrading of financial and investment houses by Moody’s. It said the US economic indicators to watch out for this week were new home sales, durable goods orders, gross domestic product, jobless claims and personal income and outlays.—Doris C. Dumlao