Stocks seen to rise
THE BENCHMARK Philippine Stock Exchange Index (PSEi) could see a “relief rally” this week after markets overseas reacted positively to statements made by the head of the powerful US Federal Reserve.
The PSEi sank about 3 percent last week, when trading ended Thursday as Friday was declared a religious holiday.
“I think we will play catch-up especially since we broke below the 7,000 level,” Astro del Castillo, First Grade Finance Inc. managing director, said in an interview. He added that investors who retreated ahead of the long-weekend could react positively to developments abroad.
“We could see a relief rally here. The current level is tempting enough for investors to pick up stocks,” he said.
Del Castillo said investors abroad welcomed the “more clear” direction coming from Federal Reserve Chair Janet Yellen, who said an interest rate increase was expected before the end of 2015.
The Bangko Sentral ng Pilipinas announced after the stock market closed Thursday that it was keeping policy rates unchanged, which industry observers had anticipated.
Luis Gerardo Limlingan, managing director at Regina Capital Development, said investors would be keeping a close eye on the 6,860 support level this week.
“We should see a bounce back to 7,110 upon a successful hold, otherwise, expect corrections to 6,600,” he said.
“Volatility remains a concern due to week-on-week increase in the 14-day average true
range, suggesting sharper intraday movements,” he added.
Limlingan recommend that investors stay on the sidelines until “we see a support bounce to confirm the index’s reaction low.”
“A range trade strategy will be raised if 6,860 holds,” he said. Miguel R. Camus
