By EDU H. LOPEZ
Share prices are likely to consolidate in the absence of market-moving news to attract inventors back to the equities market.
Investors have apparently not shaken off ongoing concerns over the direction of equities in the US and other emerging markets, says BPI Securities.
"The high price of oil, rising interest rates, and a depreciating peso, have also affected market sentiments. Technically, the market is at a crossroads and could still go either way," says BPI.
Last week’s trading, however, was not quite inspiring with a market bias may still be negative.
AB Capital Securities noted that the global markets continued their shakedown since the interest rate hike scenario emerged last month.
"Some Asian markets have even fallen to 6-month lows, erasing their year to date gains. The Philippines continues to enjoy a year to date gain of percent after a 6.3 percent fall last week."
The breakdown last week coincidentally started on a bad superstitious date (6-6-06), triggering a second wave of selling that forced the market to fall back below the major support of 2,172, says AB Capital Securities.
"News that JP Morgan downgraded Philippine bonds from "overweight" to ‘neutral’ accelerated the local market’s drop. Apparently, the downgrade was influenced by concerns on the BIR’s statements asking for a lower collection target this year of P605 billion, from the original P675.4 billion," says AB Capital.
"The interest rate contagion similarly brought the peso down to its knees in the past four weeks. The peso continued to weaken in last’s trade along with regional currencies on prospects of higher interest rates in the US."
2TradeAsia expects another flat trading session would rule market sentiment as players retain their wait-and-see stance on institutional investors’ next move in equities trading.
While interest has seemingly turned in favor of fixed income instruments following the series of interest rate hike implemented across the region, 2TradeAsia says seasoned investors are likely to hunt for opportunities in stocks that have fetched attractive ‘trading ranges’.
Interest in financials and property could slow temporarily, while volatility is seen prevailing for speculative commodity- and mining-based shares.(Edu Lopez)
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