Dull trading seen

this story was taken from www.inq7money.net
URL: http://money.inq7.net/topstories/view_topstories.php?yyyy=2006&mon=06&dd=05&file=3

Posted: 8:35 PM | Jun. 04, 2006
Elizabeth L. Sanchez
Inquirer

Published on page B1 of the June 5, 2006 issue of the Philippine Daily Inquirer

STOCK ANALYSTS ARE DIVIDED AS TO where stocks are headed this week given jitters over a possible interest rate increase.

Fitzgerald Aclan, head of research and strategy at BDO Trust, said there could be windows for bargain hunting if the US market picked up Friday.

AB Capital Securities said that while corporate long-term fundamentals remained solid, the macro-economic picture has been mixed with market players worried about higher interest rates and rising inflation.

"Despite some favorable developments in Iran, crude oil has remained above $70 a barrel as we enter into the hurricane season in the US. Meanwhile, there is growing pressure on domestic interest rates as in- dications point toward some disappointments in the government's tax collection efforts," AB Capital Securities said.

The Bureau of Internal Revenue (BIR) earlier said the government's P675-billion tax collection target was too high. The BIR failed to achieve its monthly target for April but a surplus of P17.6 billion was still achieved due to increased collections from the Bureau of the Treasury, dividends from state-owned firms and lower expenses.

Mildly easing worries, the Bangko Sentral last week kept its key interest rates unchanged.

The market's blue chip index, PSEi, hardly budged last week, rising a mere 3.78 points to 2,304.17.

"The market was actually saved by foreign buying last Wednesday across most blue chips but the upside was capped given no follow-through buying after reports of a lower-than-expected economic growth and the continued weakness of the peso," AB Capital Securities noted.