AB Capital Securities said developments overseas could still pose threat to the market but positive economic indicators in the domestic front could push share prices higher in the second quarter of 2011.
“Although most economic concerns are now out and considered, we still believe that the second quarter may turn better. External troubles may still pose risks for the market but local developments will be the driver in the coming weeks,” AB Capital said.
The Philippine Stock Exchange index, or PSEi, dropped 3.5 percent in the first three months as troubles hounding the Middle East, North African and European countries weighed on investor sentiments.
“Anxiety on how the economy will fare this year also held back investors from making aggressive moves. Changes in policy and increasing inflation became valid concerns, which kept the market below 4,000 for a time,” AB Capital said.
The deal between Digital Telecommunications Philippines Inc. and Philippine Long Distance Telephone Co. last week proved to be an impetus, propelling the market higher above the 4,000-point mark.
Analysts said the index might hold above 4,000 points if positive news emerged.
Citiseconline president Conrado Bate, meanwhile, expects the market to continue to trade on a narrow band for the rest of the year, making it hard for investors to make money.
He expects foreign investors to continue to channel their investments to the Philippines as economic conditions here remain stable. For the latest updates PRESS CTR + D or visit Stock Market news Today
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