The stock market may be able to sustain the upward momentum it has gained over the past week, picking on oversold blue chip issues and hot Internet stocks, analysts said although they are quick to point out that the sentiment of investors continues to border on "cautious optimism" due to the raging BW scandal and interest rate jitters.
"Don't count your blessings yet," said Irving Ackerman, who heads his own brokerage I. Ackerman & Co. Inc. "We're not yet sure how long the market can sustain an uptrend but I'm optimistic this would be carried out in the long term."
The 30-company Philippine Stock Exchange Index (Phisix) touched a 17-month low of 1602.96 points last Monday before slowly gaining to end the week at 1646.28 pts. Friday.
"The market is kind of beaten down, so there's still much room to tow it upwards," Wellex Global Equities research head James Lago said. "As long as no untoward incident like a transport strike or an oil price hike happens, I think there are a lot of trading opportunities that would keep the market buoyant."
He said at the moment, the market rebound appears influenced by a combination of technical buying and sentiment-driven deals based on economic and corporate fundamentals like a recovery in imports and the influx of businesses geared for the new economy -- the information technology and Internet age.
For his part, PCCI Securities and Brokers Corp. research director Gonzalo Bongolan said concerns over the possible surge in US Federal rates and, correspondingly, an increase in domestic interest rates, as well as inflation-inducing oil price hikes could undermine the market uptick.
He said the Phisix could consolidate within the 1600 to 1700 levels, but mainly propped up by bargain hunting in select blue chips and other market favorites.
Some analysts also pointed to the anticipated SEC move to slap charges on 11 brokers in connection with the BW trading fiasco as a positive indication that the regulatory agencies are doing their best to cleanse and bring order back to the bourse.
"The BW report has been scaring the hell out of a lot of people. When foreign news channels like CNN and CNBC pick up these stories, it means something else. It's rattling a lot of people abroad, it's not good," Ackerman said.
He added that with the entry of a new set of governors at the PSE, most of whom are very smart and hardworking, the public should "give these people a chance" to work as a team and tackle the bourse's problems.
"They're trying their best to get this (BW scandal) straightened out," he said. Ironically, the SEC, acting on a petition by resigned PSE vice president and BW report author Ruben Almadro, has directed the exchange to overhaul the composition of the BOG to a majority of non-brokers within six months.