Shares expected to move higher

Share prices are expected to remain on the upswing this week, driven by Wall Street’s positive performance as well as rosy economic prospects and better-than-expected 2006 budget gap, analysts said.

"Bullish sentiments remain for Philippineequities as the government aims to post a better economic growth this year of 5.6 percent, higher than five percent in 2005 and 5.4-percent growth last year," AB Capital Securities said in a report.

"Given the bullish trend, the market will continue to move higher but the uptrend will be interrupted by profit-taking from time to time," said Ron Rodrigo of Unicapital Securities.

"Earnings results for 2006 are coming out. There are a number of stock offereings in the pipeline. These factors may sustain interests in the stock market," next week, he added.

AB Capital said there could be some resistance at the 3,300 level as investors await the release of actual economic growth data for 2006 and inflation indicators for January 2007, as well as other international indicators. These include the direction of benchmark US Federal Reserve rate which is likely to stay unchanged at 5.25 percent and the effect of OPEC’s earlier announced 500,000 barrels/day cut in production that would take effect beginning February this year.

Last week, the composite index PSEi closed at 3,245.26.

"Funds are coming into the market as investors are anxious to get a better return on their savings than is available on money market investments," said AB Capital.

It expects companies to upgrade their earnings projections given the country’s positive economic environment, low interest rates and a stronger peso.

The brokerage firm, however, said it is hard to determine whether the market can sustain its gains.

Meanwhile, some investors are expected to switch to second-tier stocks and issues that have lingered long enough at their historic lows.

Stock portal 2tradeasia.com said it expects no significant fundamental change in the country’s macroeconomic prospects that should alter long-term fund managers’ view of the investment terrain.

For the month of January, the PSEi gained nine percent, higher than December’s six-percent gain.

Among the top gainers last week were SM Prime, Metrobank, Banco de Oro, First Gen, and Bank of the Philippine Islands which reached all-time highs. BPI and Metrobank rose to new 52-week highs after releasing their 2006 earnings results.

Meanwhile, Filinvest Land Inc., the property concern of the Gotianun family, will resume trading tomorrow.

AB Capital’s Erwin Balita said the stock may go up by as much as 20 percent or to P1.92 from its follow on offer price of P1.605 based on the industry’s current valuation of 30 times price earnings for this year.

2tradeasia.com said the PSEi’s immediate support is at 3,230 while resistance is at 3,270-3,280.