RP stocks bounce off slump on selective bargain-hunting

(By Doris Dumlao - Philippine Daily Inquirer)


MANILA, Philippines – Local stocks bounced out of a four-day slump on Thursday as investors took heart from the US Federal Reserve's indication that it would extend a regime of low interest rate to boost economic recovery.

The main-share Philippine Stock Exchange jumped by 1.44 percent to 2,961.63 on Thursday as prospects of a sustained US monetary stimulus alongside an ample supply of oversold local stocks encouraged selective bargain-hunting.

But value turnover at the local bourse thinned to P2.3 billion from P2.9 billion in the previous session, suggesting that there's little fire to fuel further rally in the short-term period.
AB Capital Securities said this much-anticipated rebound could just be a "dead cat bounce," that may be used by traders as an opportunity to sell on rally.

"Market fundamentals are deteriorating and it's beginning to reflect in share prices. Besides the external concerns and election woes, there is also the worry of rising commodity prices. We are beginning to see shortages in electricity, water, sugar and rice," AB Capital said.

"Earnings growth is also expected to slow down to single digit levels even as GDP [gross domestic product] growth improves," it said. Click here to read more...