Stocks are expected to sustain the upward momentum this week, as investors position ahead of the release of corporate earnings and US Federal Reserve meeting.
F. Yap Securities investment analyst Jason Escartin said a consensus the Fed would keep interest rates at current levels would likely benefit the local equities market.
“Given the interest rate hike postponement from the Fed, the consensus for a status quo is supported, given persistent weakness in the global economy—a scenario that would be favorable for equities. This would give enough breathing room for investors to realize gains, at least until the next policy decision and final meeting this December,” Escartin said.
Talks of a rate hike could prove negative to stock prices, he said.
BDO Unibank chief investment strategist Jonathan Ravelas said the market’s positive movement last week suggested a test towards the 7,300 level, and then further to 7,500 level.
The PSEi, the 30-company benchmark index of the Philippine Stock Exchange, last week climbed 2.6 percent last week to close at 7,236.38 on Friday, while the broader all-share index also gained 2.6 percent to 4,160.64.
“Local equities rose with optimism from Wall Street, with the indication of an extended stimulus program from the ECB. Adding to the optimism is the expectation that the US Fed would maintain its policy at its meeting next week,” Escartin said.
All major sub-indices ended in the green, led by services (up 4.1 percent), industrial (3.9 percent), mining and oil (3.6 percent), property (2.2 percent), holding firms (2 percent) and financial (1.3 percent).
Despite the market’s strong uptick this week, foreign investors remained net sellers last week by P1 billion, as total foreign selling hit P16.3 billion while foreign buying amounted to P15.3 billion.
Top gainers last week were MJC Investments Corp., which climbed 45.7 percent to P3.79; Jolliville Holdings Corp., which advanced 28 percent to P4.02; and Nickel Asia Corp., which rose 20.4 percent to P8.77.
Heavy losers were TKC Steel Corp., which fell 11.6 percent to P1.22; Macay Holdings Inc., which went down by 10.5 percent to P41.50; and A. Brown Co. Inc., which dipped 10.2 percent to P0.70.