Caution seen to rule stock market this week

Caution seen to rule stock market this week
By Zinnia B. Dela Peña
The Philippine Star 02/27/2006

The stock market is expected to move sideways this week as security concerns continue to be the primary concern of most investors after the government foiled an alleged coup attempt and declared a state of emergency.

Mrs. Arroyo, who survived a crisis last year over allegations of vote-rigging and corruption, invoked emergency rule last Friday, citing a "systematic conspiracy" against her by people out to topple her.

"Caution would likely rule the market early this week, until after market participants get clearer indications on specifics of government’s declaration of state of emergency. Most are anticipated to keep a close watch on political developments, especially on the length of time this measure would be imposed," online investment stock portal 2tradeasia.com said.

Some analysts, however, believe that some investors might go on bargain hunting as the alleged destabilization attempts proved futile.

"Seasoned players would likely seize on the market’s weakness to position in shares of companies with good track record in higher capital appreciation," an analyst at a local brokerage house said.

Last week, the main composite index fell 32.23 points or 1.53 percent. The market traded within a wider range between 2,047 and 2,089 with the Phisix ending the session down 21.39 points to 2,069.93 last Friday after the President placed the country under a state of emergency.

BPI Securities said the market remains in consolidation between 2,044 to 2,100 as some investors are expected to adopt a wait and see attitude until the political situation normalizes.

2tradeasia.com said while part of liquidity might be diverted in favor of fixed-income (via higher yields) and forex instruments, majority might still skew in favor of stocks to improve real return on investments.