Market seen to remain flat as investors await earnings results

Market seen to remain flat as investors await earnings results

By Zinnia B. Dela Peña
The Philippine Star 02/20/2006

The market is expected to continue trading sideways this week as investors await the earnings results of several major listed companies for clearer guidance, analysts said.

AB Capital Securities said trading range will be from 2,060 to 2,130.

Last week, the main index rose 16.87 points or 0.81 percent to close at 2,102 mainly on bargain hunting after the market touched a low of 2,044. The increase was buoyed by positive corporate earnings results and the rating outlook upgrade to stable from negative by Standard and Poor’s and Fitch Ratings.

The drop in oil prices below $60 a barrel and the rise in US markets also helped buoy market sentiment. Also contributing to the rise is the positive outlook of the latest Business Economic Survey, which serves as the barometer of perception of the business sector.

Companies that are due to release their 2005 earnings results are telecommunications giant Philippine Long Distance Telephone Co. on Feb. 27, conglomerate Ayala Corp. (Feb. 20) and SM Prime Holdings by the third week of this month.

BPI Securities said the market, however, may be volatile on concerns of more US interest hikes.

While the Fed has not signalled an aggressive series of rate hikes, it said future interest rate moves would be heavily influenced by economic reports, some of which support a rate hike.

"Investors are wary that if US interest rates rise, the central bank will also hike domestic interest rates as well, and this would weigh on the market," BPI Securities said.

BPI Securities said the Phisix needs to sustain the move above 2,100 if it is to suggest market strength.

AB Capital Securities said while the market has been showing signs of recovery, stock investments have been trickling in, mainly on persistent rumors of an impending coup and concerns that first quarter corporate results will be weak due to higher energy costs and the full implementation of the expanded value added tax.

 

http://www.philstar.com/philstar/NEWS200602200711.htm