Technical rebound seen

this story was taken from www.inq7money.net

URL: http://money.inq7.net/topstories/view_topstories.php?yyyy=2006&mon=01&dd=23&file=8

MARKETPLAY
Technical rebound seen
Posted: 3:00 AM Jan. 23, 2006

Inquirer


(Published on Page B1 of the January 23, 2006 issue of the Philippine Daily Inquirer)

INVESTORS MAY EXPERIENCE A BREATHER from the stock market's correction as a technical rebound and the expected positive sentiment from the imminent implementation of a 2-percentage point increase in the value-added tax are expected to boost prices this week.

In a research note to its clients, AB Capital Securities said the market has already "worked off some excesses" from its "steep rally" since Nov. 1, 2005.

The brokerage firm said the Philippine Stock Exchange index was moving very close to its major support level of 2,090 where it is expected to make a recovery.

On a weekly basis, the market fell 40.02 points or 1.86 percent. It closed Friday at 2,108.24.

"The index failed in its attempt to breach the 2,172 mark and looks to be entering a consolidation mode," AB Capital said.

On the positive side, however, investors are counting on the full implementation of the VAT Law next week to push prices higher.

"When the dust settles, the only major catalyst for the market will be the full implementation of the expanded value-added tax law by Feb. 1," the stock brokerage firm said. "This will shift the market's attention away from the coup worries and bring investors back from the sidelines."

"Despite the market's recent weakness, many are still optimistic about 2006's prospects because of hopes for an end to the government's fiscal woes, a retreat in oil prices and strong foreign demand for Philippine stocks," AB Capital said.

Stocks to watch this week include banking issues, especially after the central bank revealed that the industry's loan portfolio was showing signs of life toward the end of 2005.

Daxim L. Lucas

copyright ©2006 INQ7money.net all rights reserved