Philippine stocks seen to trade higher

MANILA, Philippines—Local stocks may trade with a bullish bias this week as global markets regain risk appetite now that the fiscal problems in the eurozone may be close to a resolution.

Last week, the main-share Philippine Stock Exchange index lost 55.9 points, or 1.3 percent, to 4,290.17 as global markets grappled with fears of a potential Greek debt default.

A rebound in Wall Street on Friday, however, provides a good backdrop for this week’s trading. The Dow Jones industrial index gained 75.91 points, or 0.66 percent, to finish at 11,509.09, trading favorably for a fifth straight day to post its longest winning streak in two months.

A key catalyst in Wall Street was when Treasury Secretary Timothy Geithner, in a meeting in Poland, called on European finance ministers to reach a solution to Greece’s fiscal woes.

Joseph Roxas, president of local stockbrokerage Eagle Equities Inc., predicted that the local equities market would trade higher this week.

“It [EU resolution] was never in doubt but that’s how markets work,” Roxas said, referring to investors’ reactions to day-to-day developments in the EU.

Roxas said the market would likely muster enough strength to rise past a key resistance at 4,300 but likely not breach 4,400 yet. He noted that during the market’s downturn in the last few weeks, the pullback was limited as the index did not even test 4,200.

While conditions in both Europe and the United States might be fixed for now, AB Capital Securities analyst Maria Arlysa Narciso said a lasting solution was still needed.

“Without positive factors to drive the PSEi up, the index may remain under the mercy of events in foreign markets,” she said.—Doris C. Dumlao