ILOILO City – The Philippine stock market experienced a tremendous drop last week as it fell below the 7,000 point level to around 6900, before closing slightly above 7,000 points on Friday.
The fall of the Philippines Stock Exchange index (PSEi) is attributed to the weak Philippine peso, which is being influenced by various poor economic factors.
Technical analyst Hernan Segovia argues that as long as the peso continues to weaken and national inflation is not brought under control, the market will never be able to recover.
“As long as the peso keeps getting weaker, the market might continue to be a concern,” Segovia said. “Last week, the market was fragile and on Friday it entered bear market territory, closing at around 7,000 level.”
Despite these problems, Segovia said that the sharp drop of the market does offer some measure of hope for investors and traders.
“It’s a little light at the end of the tunnel,” Segovia said. “It’s better for the market to make a fall – a big fall than a slow death. So we have a good chance right now to go back to 7,400 to 7,500 and from there, we’re going to see if it will recover or maybe range trade.”
Segovia also added that given the bearish situation, many blue stocks are now quite cheap, and open to bargain hunters.
“Blue chips are cheap right now and offer a good opportunity for a quick profit. I would go with Metrobank and Ayala – Ayala Land,” Segovia concluded.
As of 2:30 p.m. on Monday the PSEi stood at 7,049.60./PN
