Trading likely to be range-bound – analysts

Trading at the stock market is expected to be range-bound this week as players take their cue on interest rate trends.

Stock portal 2tradeasia.com said investors are expected to monitor the Bureau of the Treasury’s (BTr) appetite in accepting bids during their Treasury bill (T-bill) auction today, after having canceled its offering for one-year notes.

"Borrowing costs will continue to remain tame (favoring property and financial sectors over the long haul), as the system remains awash with cash and little pressure for government to crowd out the private sector for funds," said 2tradeasia.com.

Despite calls from some fund managers, benchmark rates may have already bottomed-out, investment prospects remain bright, largely reinforced by improved fiscal and monetary programs, 2tradeasia.com said.

Mid-week, institutional fund managers will check indications on US consumer prices, housing, industrial production and jobless claims, to see how one of Asia’s largest export destinations will behave in ensuing quarters this year.

Analysts said investors are also awaiting the listing of National Reinsurance Corp. (PhilNare) shares on the exchange this Friday. It offered a total of 638 million shares to the public, representing 30.7 percent of its outstanding capital stock, at P3.80 per share.

PhilNare expects to raise P2.4 billion from the initial public offering which will be used to increase the company’s capacity to accept and retain premiums, allowing it to compete in the regional reinsurance market.

2tradeasia.com said market attention would be on second and third liners, given the dollar’s weakness and rising metal prices, among others.

"Some might check for sequel stories on related expansion, acquisition and foreign tie-up plans, as well as stocks venturing into additional capital calls and candidates for backdoor listings. Selected index-linked stocks might also be noticed, specifically those that would report double-digit earnings growth in the first quarter of 2007," 2tradeasia.com said.

Immediate support is seen at 3,170 to 3,200 while resistance has been pegged at 3,230 to 3,250.