Index to attempt staying above 8,000 mark

The local stock barometer is seen attempting to build a base above 8,000 this week as investors digest the final stream of third quarter local corporate earnings reports.

Last week, the main-share Philippine Stock Exchange index (PSEi) rose by 1.11 percent to close on Friday at 8,065.76, aided by better-than-expected third quarter gross domestic product (GDP) growth numbers.

Third quarter GDP growth accelerated to 6.2 percent year-on-year from 5.5 percent in the second quarter. This was better than the 6-percent market consensus.

“The week’s close at 8,065.76 highlights another try toward the 8,200 to 8,420 levels in the near term,” BDO Unibank chief strategist Jonathan Ravelas said.

“Failure to break above said levels could lead to more profit-taking and bring the index below 8,000 anew. Watch this space,” he added.

ING Philippines economist Nicholas Mapa said robust consumption spending would likely continue as inflation would likely remain below or at the lower end of the Bangko Sentral ng Pilipinas’ inflation target.

The country needs to grow by 6.7 percent in the fourth quarter to reach a full-year average growth rate breaching 6 percent.

“The key to unlocking growth of 6 percent will likely rest on two key sectors. Car sales, which constitute a 54 percent of total durable goods orders and factor in 8.4 percent to total GDP will be key. Thus where cars go, we can expect GDP to follow. With BSP cutting policy rates to alleviate some pressure from households, we can hope for rebound by year-end with recent CAMPI (Chamber of Automotive Manufacturers of the Philippines Inc.) sales numbers offering some hope for a strong finish,” Mapa said.