The 30-company Phisix closed the week at 1,541.65 points, its highest in four months or since Sept. 5, 2000 – a month before the explosive revelation of Ilocos Sur Governor and jueteng henchman Luis "Chavit" Singson of President Estrada’s role in the multi-million peso illegal numbers game.
An analyst with a local brokerage house said the Bangko Sentral’s move to reduce its overnight rates and the price rollbacks by the oil players worked wonders to soothe the frayed nerves of investors glued on the impeachment trial.
"It gave them something to hope for as the impeachment trial nears its end," he said.
While a break-out into the 1,600-point level is not far-fetched, he cautioned that it would still be best to take a defensive position – meaning hold on to your portfolio of choice stocks – until after the result of the impeachment trial is known.
He said despite the market uptick, most of the trades were merely concentrated on a few index-heavy blue chips such as PLDT, Meralco, the Ayala group, SM Prime, San Miguel and ABS-CBN which are preferred by foreign brokers and institutional investors like the government financial institutions (GFIs).
Another local broker mentioned that aside from the country’s business and political environment, foreign factors can also make an impact on the market, the same manner the bourse reacted favorably to the recent decision of the US Federal Reserve to reduce interest rates.
A reduction in US rates creates a ripple effect on other markets and at the same time frees up global funds for investments in overseas markets.
The Fed is set to meet and assess its interest rate policy later this week to coincide with a planned meeting by the OPEC oil cartel on output quotas, which could determine the immediate fate of world petroleum prices.