By Denise A. Valdez, Reporter
LOCAL SHARES are seen to extend their climb this week as businesses continue to reopen due to the relaxed quarantine.
The bellwether Philippine Stock Exchange index (PSEi) ended Friday’s session at 6,465.13, down 52.36 points or 0.80%.
Friday’s performance snapped a seven-day climb for the main index, which was enough to bring it 10.7% higher on a weekly basis.
Value turnover slipped 2.8% to an average of P8.63 billion, but foreign investors were net buyers in four of five trading days, bringing the average net inflow to P583.85 million from a net outflow of P227.71 million the previous week.
“Local equities’ 10.7% advance to 6,465 during the week on sustained average turnover of P8.6 billion is a good sign on fund managers’ optimism for recovery,” online brokerage 2TradeAsia.com said in a market note.
Last week was the first week that Metro Manila was on a relaxed lockdown after over two months of suspending most economic activities. Investor optimism over the resumption of work, on top of positive news involving global economic data, pushed the PSEi beyond its 5,400-5,700 range.
Heading into the second week of a relaxed lockdown, Equity Trader Aniceto K. Pangan from Diversified Securities, Inc. said he expects the market to maintain its upward track.
“With the Philippine government continuing to ease on lockdowns by allowing other businesses to reopen, we may see a sustained rebound in the local market in tandem with other markets around the world,” he said in a text message.
Mr. Pangan added investors will take note of the country’s “strong fundamental standing at a low debt-to-GDP (gross domestic product) level of less than 42%.”
2TradeAsia.com likewise expects the market to extend its climb, saying news of a potential coronavirus disease 2019 (COVID-19) vaccine will keep fuelling investor optimism.
It specifically mentioned Britain’s AstraZeneca which is developing a COVID-19 vaccine with the help of Oxford University and billionaire Bill Gates. “If this headline advances, we could see a return of cash towards equities as investors optimize on windows for capital gains,” 2TradeAsia.com said.
Another driver would be legislative measures such as the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) and the Accelerated Recovery and Investments Stimulus for the Economy (ARISE). The brokerage said the way these measures will be tackled will help sway the market in the coming days.
“While COVID-19 bruised global economies, healing is bound to make its mark too. Seize on dips to gradually position, and opt for modest gains on rallies,” 2TradeAsia.com said.
The brokerage is putting support for the market at 6,400 and resistance within 6,600-6,800.