PSE index to hit 6500 level in 2013 - analyst

Posted at 12/10/2012 3:22 PM | Updated as of 12/10/2012 3:47 PM

MANILA, Philippines - An analyst expects the Philippine Stock Exchange index to hit the 6,500 level next year, after hitting 5,797 last week.

Ismael Cruz, president of IGC Securities, says foreign buying of blue chips has doubled from last year.

He adds the mining sector will likely recover in 2013 because of the improvement in commodity prices.

"We're seeing a recovery in mining sector (next year), and this is premised on commodity prices turning from lows, mainly because of the manufacturing outlook in China. Manufacturing output in China has recovered and prices of copper, nickel have recovered from their lows. Philex is is expected to go back to production in the second half of next year," Cruz told ANC.

But Cruz says the market is already at overbought levels and will likely dip soon. He notes though investors should take advantage of minor pullbacks to buy stocks.

"We see the RSI 15-day at 80, which says it's overbought. This is telling us there could be a slight, very slight pullback. Not even a correction because a correction is a 5-10%. We see a minor pullback probably 2 to 3%. We see solid support 5,500 and when that happens, take advantage of the opportunity to accumulate stocks," he said. - ANC