Share prices are expected to move sideways with an upward bias this week as market sentiment turned positive on a dovish outlook for interest rates.
Last week, the U.S. Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) both cut interest rates by 25 basis points. The Fed and the BSP also hinted at another round of rate cuts early next year.
Analysts said the rate cuts help create a supportive backdrop for companies to continue their expansion plans.
“The local market is back above the 6,000 level again, attributed to the rebound driven by the Fed and BSP’s monetary easing,” said Japhet Tantiangco, research head of Philstocks Financial Inc.
But while the rate cuts provide a boost to consumer and investor confidence, Tantiangco said lingering corruption concerns will continue to weigh on economic activity.
“Sustaining a position above the said level remains questionable, however, amid lingering concerns and challenges over our economic growth outlook,” he added.
Last week, the Philippine Stock Exchange index jumped 1.47 percent to close at 6,036.72, while the broader all shares Index declined 1.23 percent to 3,434.94.
Average value turnover improved to P7.9 billion, up from the previous week’s average of P6.23 billion.
Foreign investors were net sellers, with total outflows at P4.48 billion.
Despite the market’s recent rise, analysts said most stocks are still at bargain levels.
