Philippines share prices will likely follow the lead set by Wall Street, following promising signs that the United States may avoid an economic slowdown, dealers said on Friday.
The local market already began recovering this week and has been encouraged by US President George W Bush's announcement of a plan to rescue homeowners facing foreclosures, easing concerns about the US subprime mortgage crisis.
"Whatever happens to the US market, the Philippine market will follow," said James Lago of Westlink Global Equities. Concerns over a short-lived mutiny by renegade military soldiers last week have already faded, he said. "That has already been factored in. But investors are still looking at what is happening with the US market," added Lago.
For the week to December 7, the composite index rose 166.84 points or 4.7 percent to 3,745.39 points. Average daily volume fell to 2.56 billion shares but value rose 4.92 billion pesos (117.8 million dollars) from 3.82 billion shares worth 4.575 billion pesos in the previous week.
"We're still fully dependent on the performance of the US market," said Nestor Aguila, President DA Market Securities. However he also said the market was entering the traditional Christmas season when trading is usually slim. "We are entering the zone for Christmas so we're basically just consolidating," he said predicting the index would trade between 3,680 and 3,800 points.
Aside from that, both Philippine economic fundamentals and the corporate indicators of blue chip stocks were doing well, he added.