Analysts said investors are likely to maintain a cautious stance, awaiting first quarter domestic GDP (gross domestic product) results and the April government budget report. The GDP report is due to be released on May 29.
Investors failed to get any sort of direction from the first quarter corporate reports as the results were mixed with only the telecom sector showing promising prospects.
Analysts were also quick to add that the threat of a global slowdown may continue to dampen investor interest. U.S. unemployment continues to rise and could lead the world’s biggest economy to a double-dip recession.
BPI Securities said the market will remain in consolidation trading within the 1,040 to 1,100-point range as investors await more positive news."The main composite remains in consolidation. We are also cautious of the market since the Phisix has not been able to break the 1,086 to 1,100 resistance change," BPI Securities said.
BPI Securities said while the immediate down trendline resistance is intact at 1,081, the market needs to establish a higher high and higher low to set a bullish tone. ‘It held at 1,040 and established a higher low but it also needs to establish a higher high," the Ayala-owned brokerage firm said.
Philstocks.net said while it believes that the worst is over, uncertainties on next year’s elections and the global economic picture will continue to play a big factor in boosting investor sentiment.
The government earlier reported that the agriculture sector grew by only 2.79 percent in the first quarter this year compared with the 5.24-percent growth recorded in the same period a year ago. The 2003 first quarter growth is significantly lower than the government’s full year target of four percent.
Output was adversely affected by lower rainfall, which decreased by 26 percent as against the normal rainfall pattern.
The modest growth posted was led by the crops sub-sector which was boosted by corn production. Corn output rose 21.9 percent while palay production declined by 0.26 percent.
New borrowings by the Arroyo administration bloated the National Government’s total debt stock as of February this year to P2.906 trillion from P2.875 trillion. The latest data from the Department of Finance indicates that Filipinos now owe P36,325 each.
As the government guaranteed more loans to government-owned and controlled corporations as well as private borrowers which were given sovereign guarantees on their borrowing, the government’s contingent liabilities also shot up from P581.1 billion in January to P609.2 million in February.
The local equities market fell by 13.73 points or 1.3 percent week on week to 1,059.53 as bombing incidents both here and abroad aggravated investor worries of more terrorist attacks.
As a result of the recent spate of bombings, the US government has warned of more terror attacks against its citizens in the Philippines, Malaysia and Kenya. US officials believe that there is a possible connection between the recent attacks in Mindanao and the suicide bombing in the Saudi capital.
President Arroyo, for her part, authorized the Armed Forces yesterday to use aerial and artillery attacks on "embedded terrorist cells" which she blamed for recent bombings and other attacks in Mindanao.