ILOILO City – Amidst a string of bad news, the Philippine stock market may finally be ready to recover.
Local technical analyst Hernan Segovia reports that after weeks of poor economic reports, loss of foreign capital and bad inflation, many investors now feel that the worst has passed, and are now prepared to inject fresh capital into the market.
The Philippines Stock Exchange index (PSEi), which has experienced strong losses in the past few months has stalled at around 7,500 and has closed near the 7,800 level on Friday, which indicates a strong area of support.
“This week, we have seen the index test the 7800 level,” Segovia said. “This is based on the thinking that the inflation has peaked, and now people in the side-lines are returning into the market with the hope that the worst has past.”
When asked about the market’s prospects, Segovia was optimistically cautious.
“We might see the index going up from here,” he said. “The selling has abated going forward, barring any bad news, we might see a slight recovery.”
Segovia also added that even the latest news about inflation and low foreign direct investment have been absorbed by the market weeks ago.
“The Market has already absorbed and discounted foreign outflows,” he said. “So when the foreign capital comes back it will be easy for the index to get past the 8,000 level.”/PN