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MANILA – Caution is seen to rule trading at the Philippine stock market this week amid mounting concerns about the health of the world’s biggest economies.
Stalling growth in the US labor market joined has become another source of worries, which already includes Europe’s spiraling debt problems and a slowdown in China.
"Sustained doubts on the momentum of the US economic recovery, magnified by poor job market numbers last week, may keep investors apprehensive on increasing their exposure to equities," said Jun Calaycay of Accord Capital Equities Corp.
On Friday, the Dow Jones Industrial Average wiped out this year’s gains, sinking 274.88 points, or 2.22 percent, to 12,118.57.
This followed a report that US companies added 69,000 jobs, the lowest this year. Unemployment also rose to 8.2 percent, raising hopes of further intervention by the Federal Reserve through an additional stimulus program.
The dismal May jobs report capped a weak of disappointing economic figures from China and deepening problems in Europe as Spain's bank crisis worsens.
"Although there are negative factors outside of the Philippines, the strength of its economic fundamentals provide a balance to external troubles," said Maria Arlysa Narciso of AB Capital Securities Inc.
Despite external troubles, the Philippine composite index managed to gain 2.77 percent on favorable local news such as the better-than-expected first quarter growth of 6.4 percent and a Moody's credit outlook upgrade.
"While we laud the latest jump in equities participation, there are still regional risks to be considered that warrants another range-trading approach," said Freya Natividad, investment analyst at 2TradeAsia.com.
She said the benchmark index has to stabilize above 5,000 to support additional buying.
Gaming stocks may be in for a tough week after reports showed revenues at Macau, the global gaming haven, grew at their slowest pace since 2009, Calaycay said.
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