PSEi seen to trade between 7,800-8,100 level this week

CEBU, Philippines - The Philippine Stock Exchange index (PSEi) is expected to trade between 7,800 to 8,100 this week after it breached the 8,000-level last Friday.

"Next week (this week), expect the local equities market to be driven by fund flows and data releases locally and globally. In addition, a shallow correction can potentially result as the market reacts to the slower-than-expected OFW remittances," BPI Asset Management said in its weekly review.

"Trading range could be from 7,800 to 8,100," it said.

Official data earlier showed that OFW remittances grew at a slower pace in May amounting US$2.4 billion, up 1.8 percent.

The PSEi surpassed the 8,000-mark on Friday as optimism abounds and foreign investments flowed in, posting its highest close for the year at 8,030.06, up 73.92 points or 0.9 percent.

"While Asian markets, including ourselves, benefited from positive news abroad, moving past the 8,000 level shows that investor confidence in out market remains high, and provides some early momentum as companies prepare to disclose their mid-year earnings results in the coming weeks," PSE President and CEO Hans B. Sicat said in an earlier statement.

Year-to-date, the PSEi is up 15.5 percent.

"Prospects of easing globally continued to support risk-on sentiment, with liquidity finding their way to the shores of economies that promise grwoth both on the macro and firms level; resulting in the flows-driven rally of late in the stock market," BPI Asset said.

Data from Bangko Sentral ng Pilipinas showed that US$378 worth of foreign funds bought in the local stock market for the month of June.

"In addition, talks of infrastructure spending by the government amounting to north of 5 percent of GDP and the resilient consumer spending further contributed to the local bourse's strength," BPI Asset said.

For last week, foreigners were net buyers at US$158 million. Year-to-date, net foreign inflows reached US$903 million. (FREEMAN)