Stocks seen to rise

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Stocks seen to rise
Posted: 11:20 PM Jan. 15, 2006
Elizabeth L. Sanchez
Inquirer

(Published on Page B1 of the January 16, 2006 issue of the Philippine Daily Inquirer)

STOCKS continued to rally last week, touching a 10-month high, on easing fiscal concerns and lower interest rates, analysts said.

Grace Cerdenia of online brokerage 2TradeAsia.com said the key catalyst that has been aiding sentiment was the government's fiscal-balancing story and the resulting stable interest rate outlook.

She said trends from the Bureau of Treasury's auctions have supported this thought, after the Treasury rejected high bids for the 90-day tenor last week.

"Also, local monetary authorities maintained benchmark interest rates steady, driven by stable trend expectation in consumer prices. While the peso's strength has partly aided the picture, stabilization within P52.40 to P52.70 may ensue, unless significant dollar-based investments flow into key sectors,"Cerdenia wrote in her weekly report.

Week-on-week, the benchmark index rose 14 points or 0.6 percent to 2,148.27.

AB Capital Securities wrote in a weekly report that the index was on the verge of trying to break the 2,172 resistance mark before political scandals again erupted.

"This should be a good indication that investors are slowly discounting the political distractions that occurred last year, and giving more emphasis on economic and financial concerns," AB Capital said.

News of mergers also bolstered shares of Banco de Oro, which touched an all time high of P38 a share. BDO has offered to merge with third largest Equitable PCI Bank, which also hit a 5-year high.

But AB Capital warned that a thorn in the market's side was the risk of higher oil prices.

"In fact, oil players are contemplating to raise pump prices anew as crude oil prices reached a 3-month high of $64.80 (last Friday). Since the Bangko Sentral's decision to raise rates last October, crude oil prices jumped 6 percent on concerns of winter temperatures in the US Northeast (largest heating oil market), declining crude stocks (build-up offset by higher projected 2.9 million barrels drawdown last week), and mild tensions in the Middle East," AB Capital wrote.

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