Stocks seen flat as investors prepare to go on vacation

Local stocks are expected to go into consolidation mode this week as most investors opt to go on the sidelines ahead of the Lenten break and due to the absence of fresh incentives to trade.

AB Capital Securities research head Jovis Vistan said market sentiment may also be dampened by less liquidity going into the tax payment season.

Last week, the PSE index (PSEi) shed 12 points to close 0.5 percent lower week-on-week to 2,196, mainly due to domestic and international interest rate concerns as the Fed continued their credit tightening policy last Tuesday night.

Vistan, however, expects the market to have a positive bias as the exchange shifts to the more internationally acceptable free float weighted index system. "Gains will be aided by index fund purchases as fund managers scurry to acquire some quality issues, which were added to the index or whose weights have increased," Vistan said.

Stock portal 2tradeasia.com said speculative stocks are likely to gain favor, supported by bullish expectations within commodities futures. "Fundamentals are being driven by increased metals demand especially for gold-affinity havens such as China and the Middle East, bolder steps to raise the bar in terms of accumulated international reserves, higher energy consumption as a result of improved economic growth outlook, and telco prospects that has supported demand for copper, among others," 2tradeasia.com.

"Among fund managers, fiscal balancing and stable monetary policies have been key on the Philippines’ marketing angle, even as skeptics are likely to keep tab how these would translate to first quarter 2006 numbers," 2tradeasia.com said.

On the corporate side, Metro Pacific Corp. announced a re-organization/recapitalization plan involving the creation of a new company, Metro Pacific Investments Corp. which will emerge as a debt-free investment company.

Shares of Macroasia went up last week after it disclosed to the public it received a a mineral production sharing agreement (MPSA) from the state-run Mines and Geosciences Bureau covering 1,114 hectares of land in Brooke’s Point, Palawan. The MPSA gives it the exclusive right to conduct mining operations within the contracted area.

MacroAsia is now in talks with major Japanese, Chinese and Canadian mining firms for the possible joint exploration of a mining site on the Southern island of Palawan.

Moody’s Investors Service has placed the Baa3 local currency corporate family rating of Globe Telecom Inc. on review for possible upgrade. At the same time Moody’s affirmed GLO’s Ba2 foreign currency senior unsecured ratings, with a negative outlook which is unchanged. According to Moody’s, Globe has developed a stable operating platform.

Benguet Corp., meanwhile, said it is considering expanding production at its Acupan gold mine on the heels of higher bullion prices.