Philippine trading to remain anemic without leads

MANILA, Philippines - The Philippines stock market is expected to move sideways this week with no major catalysts to provide a clearer direction, analysts said. Analysts added the index will still trade within a narrow range, with investors limited to taking their cues from earnings reports, both from the overseas and local fronts. They also said sentiment will hinge on what the central bank will do, with rising food and oil prices flaming higher inflation risks. "We may still see some consolidation. There’s nothing yet to get investors to jump into the market and make the market upbeat again," said DA Market Securities Chairman Nestor Aguila. The 30-company main index on Friday closed weaker on the absence of market-moving news. It shed 0.84% or 24.81 points to 2,915.67, while the broader all-share index lost 0.68% or 12.17 points to 1,790.06. "We believe the market would continue to trade within the 2,900 to 3,000 range over the next few days given the continued lack of new information to guide the market on earnings expectations," said brokerage Campos Lanuza & Co. in a note to clients. It added that investors should maintain a cautious stance ahead of first-quarter earnings as the month of May nears, due to possibly disappointing earnings brought about by a global slowdown. "Companies will begin reporting first-quarter earnings, and this, in our view, will be crucial to whether the market will break out of the 3,000 resistance level," the brokerage said. Jose Vistan, research chief of AB Capital Securities, said market players will still stay on the sidelines on mounting worries that surging oil prices will temper economic growth. "The market backdrop is still bearish," he said. "It’s still a wait-and-see market with the rise in oil fueling further inflationary worries." Light sweet crude oil traded on the New York Mercantile Exchange peaked anew Friday on jitters over oil supplies in Nigeria and fears of an economic slowdown in China, the world’s largest energy consumer. It hit a record $117 per barrel but still settled up at $116.69. Meanwhile, US stocks gained momentum and rallied back almost 2% as investors cheered better-than-expected earnings from Citigroup and Google despite announcements of planned worker layoffs. The Dow Jones Industrial Average surged 1.81% or 228.87 points to 12,849.36. The Nasdaq composite index rose by 2.61% or 61.14 points to 2,402.97, while the Standard & Poor’s 500 index added 1.81% or 24.77 points to 1,390.33. Asiasec Equities Sales Head Oliver Plana said investors will also be waiting for announcements from the Bangko Sentral ng Pilipinas (BSP) about its monetary policy after it meets on Thursday. "Rising prices will put pressure on inflation and limit the BSP with what it can do to interest rates," he said. "It would be difficult for the central bank to cut rates especially with inflation on the rise." Analysts all agreed that the BSP would not likely touch its key rates, with inflation in the first three months of the year already averaging 5.56%, above the 3% to 5% target band of the government. In its meeting last March, the central bank kept its overnight borrowing rate at 5% and overnight lending rate at 7%. - BusinessWorld