Stocks likely to post gains

Given its strong gains last week, the local stock market is likely to continue its upward trek and might test the 2,880 level due to the string of positive economic developments.

OFW remittances rose 14.4 percent in the first nine months of the year while crude oil prices have dropped and touched a one year low at $56.25 a barrel despite OPEC’s declaration last month of future production cuts.

Stock portal 2tradeasia.com said the interest rate- and consumer spending-sensitive issues, especially those that are likely to land on institutional fund managers’ portfolios, might take center stage this week.

"Chartwise, the market remains on course to its bullish cycle having declined from 1997-2003. While barometers are clearly re-testing 1997 highs (2,919 last 30 June 1997, and 3,220 on April 30 1997), government’s fiscal reform program has clearly delivered results, further reinforcing the bourse’s upward momentum," said 2tradeasia.com.

2tradeasia.com said its bullish projection is driven by major positive developments in the property, financial, mining, and power sectors.

The property sector continues to benefit from the spectacular growth in business process outsourcing demand, robust OFW remittances and the recurring build-up from improved commercial leasing operation.

Banks have acquired additional cash from accelerated disposals of non-performing loans and assets in compliance with Basle II’s increased capitalization requirement.

Recent data on commercial bank lending has been encouraging, as growth improved to 6.1 percent in September at P1.6 trillion versus August’s 2.5 percent.

"We may see further improvement in the remaining months this year, especially after local monetary authorities effected their tiered-interest rate approach to prod financial institutions to lend more, than flood the Bureau of Treasury’s fixed-income auction requirements. Such policy would help balance off the recent increase in money supply, although most would continue to monitor the central bank’s next decision on domestic interest rate trends," 2tradeasia.com said.

2tradeasia.com noted that investors looking to position at present levels have also extended their portfolio horizon for 2007, especially for sectors that are widely expected to outperform the bourse next year.

Coco bio-diesel firm Chemrez Technologies Inc.’s additional listing of P1.5 billion worth of shares starts today until Nov. 24. Shares are sold at P4.40 per share, a 15 percent discount to current market close.