Market‘s winning streak seen to continue this week

Picking up from where it left off last week, the stock market may continue its winning streak on follow-through buying as investors position for stocks with strong 2006 earnings prospects amid the country’s improved fiscal performance and a brighter outlook for the economy.

Francisco Liboro, president of PCCI Securities, said the market is expected to resume its uptrend this week, with investors’ attention focused on property and mining stocks.

Last week, the composite index gained 39 points or 1.7 percent from last week to close at 2,263, its highest since August 1999. The rise was attributed to better first quarter budget deficit numbers and skyrocketing gold prices.

With prices of gold reaching new record levels, investors snapped up on mining issues including Philex Mining, Lepanto Consolidated, Manila Mining, Apex Mining and Atlas Mining.

Philex is expected to post a net income of between P1 billion and P1.5 billion this year. It has reportedly earned P500 to P600 million in the first quarter this year, already surpassing 2005’s full year net income of P409 million.

Apex’s principal asset – the Masara Gold Mine in the south of Mindanao Island – reportedly has a gold reserve in the range of 500,000 to 600,000 tons, according to the Bureau of Mines and Geosciences. The mine, which ceased production in March 2000, was previously operated as a small-scale underground operation and has a treatment plant with the capacity to process 1,200 tons of ore per day.

Some analysts, however, said surging oil prices could dampen market sentiment. The government has already warned the public about higher crude and refined petroleum prices as oil companies have pronounced plans of successive hikes of as much as P50 centavos/ liter on fuel prices in the next several weeks.

"With the inevitable rise in prices, we won’t be surprised on any upward adjustment in inflation targets by mid-year. This may eventually force the Bangko Sentral ng Pilipinas to adopt a more restrictive interest rate policy in second half of the year," AB Capital Securities said in its weekly market report.

Megaworld Corp., an upscale property development firm owned by businessman Andrew Tan, will list today around 4.51 billion shares that were sold in an offering this month to raise funds for various projects. The company raised P6.22 billion from the offering. Each share was sold for P1.38.