Market shows no sign of retreating

MANILA, Philippines - Showing no sign of retreating up, the local stock market is expected to maintain its uptrend this week as investors remain bullish about the local economy and equities.

Last week, the Philipine Stock Exchange index (PSEi) extended its run-up for six consecutive weeks, closing 124.99 points higher at 4,236.98 or just 8.07 points below the record close of 4,245.05 set Thursday. The main composite index has already gained 19.06 percent from the six-week rally and 38.8 percent since the start of the year.

“Confidence in the broad economy in general and in equities in particular have remained elevated, despite persistent technical signals of a possible pull-back.In fact, as we have experienced last week even minimal drops of 50 points, have become open season for bargain hunters. While a massive correction is being warned by some, and even by an increasing number, there is an obvious impatience to get on the bus as soon at it slows,” Accord Capital Equities Inc.’s Jun Calaycay said.

“At this point, it appears that only a massive meltdown in the US markets, or an unforeseen problem in the domestic front, could possibly overturn local sentiments and leave the market to sellers. Absent such negative impetus, we can most assuredly find buyers at every turn,” Calaycay said.

On a monthly basis, September’s P128 billion turnover is the year’s biggest, exceeding the P117 billion recorded in March this year when the index gained 3.9 percent.

“October doesn’t seem far behind, with the month already up 3.3 percent. Total value month-to-date already accounts for almost 40 percent of the nine-month average of P85 billion,” Calaycay said.

“History is replete with examples of major turns being made by the market just when optimism is at its highest and there appears no stopping the bulls’ rampage. Moving forward, there is still much the market is looking forward to that continues to lend it a positive bias,” he pointed out.

Among the stocks that have caught investors’ fancy last week were Alliance Global Group Inc. and Aboitiz Power, both soared to a new 52-week high before closing at P10.50 and P24.15 apiece, respectively. Other stocks that had a strong following last week were Semirara and DMCI Holdings which settled at P158 and P33.40 each, respectively.

AB Capital Securities’ Prince Anthony Yeung said the oil and mining sector will continue to take the limelight this week.