Market seen slowing down this wk

Although the market made some headway last week, trading activity at the Philippine Stock Exchange is expected to slow down this week ahead of the Lenten break, analysts said.

In its weekly market report, BPI Securities said it expects investors to cash in on gains made last week to avoid any uncertainties ahead of the Lenten vacation.

"We expect some profit taking ahead of the long vacation. Investors are still likely to maintain their cautious stance given the security and political concerns," BPI Securities said.

AB Capital Securities research head Jovis Vistan said investors will stay on the sidelines due to the dearth of incentives to trade. "In the holiday shortened trading week, we expect market players to hold back from aggressive buying ahead of a long weekend. The recent warnings of terrorism will make investors more skeptical of holding shares during the holidays. Besides the threat of terrorism, there are a lot of other cross currents in the market right now and this will cause investors to move to the sidelines," Vistan said.

Vistan said uncertainties in the political front have also dampened investors’ sentiment. "Investors are still a little afraid to step out ahead of the May 10 elections. The race from the Philippine presidency appears to be neck to neck, raising the possibility that we could see another Taiwan in the making. In the last elections in Taiwan, Taiwan’s newly elected president agreed to a recount in an election that brought about several violent protests as well as assassination attempts," Vistan said.

RCBC Securities, for its part, said the Phisix is seen to consolidate further as it finds a strong support floor to stage any recovery. "Market sentiment, in general, remains weak and most market participants are still fence-sitting, entering the market only when stocks fall down to attractive levels. As we enter into April, first quarter earnings reports could start trickling in, providing further trading guidance for market players," RCBC Securities said.

Last week, the Philippine Composite Index closed at 1,450.91, up by 59.99 points or 4.31 percent week on week. The rise was fueled by the recovery of major markets abroad. PLDT, gained on the back of an overnight rise in its ADR to $17.10 or up by $0.77 per share. PLDT (TEL ) share price was up by P25/share to P975.

PLDT president Manuel Pangilinan announced that its current year’s profit may exceed their initial forecast of P18 billion as its subsidiary Smart Communications Inc. acquires Pilipino Telephone Corp. (Piltel’s) and its debt.

PLDT registered a net income of P11.2 billion in 2003 largely on the back of a strong wireless subscriber base. Acquiring Piltel will boost Smart’s profits by as much as P2 billion per year Piltel share price was up by P0.02 to P1.74/share.

Investors also cheered on the capture of four members of the al-Qaeda-linked Abu Sayyaf extremist group. Among those who were captured was one who claimed responsibility for the Feb. 26 explosion of Superferry 14. Seized from the terrorists were powerful explosives.

The market’s gain was also attributed to the improvement of the peso which rallied from the record low of last week at P56.45/dollar as corporate demand ebbed.

Investors are also anticipating good 1Q04 earnings as SMC announced that its net income for the first two months this year was up 16 percent to P1 billion.