Market to continue trading sideways this week — analysts

- Zinnia B. Dela Peña () - April 19, 2004 - 12:00am
The market is expected to continue trading sideways this week as fund managers have yet to move out from their present wait-and-see stance on equities given the uncertainties in the political front.

"We expect the market to continue with its sideways movement as the election draws near Market sentiment is still cautious given the light turnover," BPI Securities said in its weekly market report.

BPI Securities, however, still sees bargain hunters taking advantage of market volatility to accumulate select stocks with good earnings prospect for the year. "Investors will continue to look for opportunities during a correction phase to accumulate select stocks in anticipation of good first quarter results (telecom and power)," BPI Securities said.

Last week, the main composite index fell 18.7 points or 1.23 percent on profit taking as the market was near the overbought level during the start of trading.

"Investors were lethargic as they came back from a long weekend. Trading in the local equities market was mixed although turnover was fairly active. The benchmark indices bounced between gains and losses throughout the week before turning lower as investors weighed whether a US rate hike would wilt optimism for corporate profits," stock investment portal said said the worries from abroad overshadowed the optimism of the improving prospects of President Arroyo’s chances in the May polls. This despite the bullishness of the peso which reached a high 55.60 against the dollar last week.

It was the peso’s highest level since Jan. 22 this year.

Fresh borrowings by the government and inflow of overseas contract workers‚ remittances boosted the peso.

On the other hand, Chelsea Dipasupil, an analyst at RCBC Securities expects the market to improve this week as the election politics’ mudslinging has abated relative to previous months.

In the latest Pulse Asia survey, President Arroyo has gained the lead from movie actor Fernando Poe Jr. Investors appear to favor a GMA Presidency as they prefer continuity and less uncertainties. GMA’s chances have also been enhanced by Presidential candidate Raul Roco’s announcement to withdraw from the campaign trail to seek medical treatment in the US for lower back pains. If Roco totally withdraws from the race, it is likely that his votes will go to President Arroyo.

"Optimism is slowly coming in and this will also translate to a slow ascension for the stock market. Investors will not be too enthusiastic as they have to factor in interest rates, a close election and geopolitics. However, in the end, corporate earnings and valuations are going to dictate the market’s fate," said.

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