Market seen flat on lack of positive leads

The stock market is expected to consolidate within the trading range of 3,200 to 3,300 given the lack of positive leads and concerns over the upcoming elections.

Last week, the market went down by 0.01 percent, or 0.46 points, to close at 3,271.53 with the broader all shares index dropping by 2.14 points.

"Stocks are expected to consolidate because it is near the elections," said Nestor Aguila of the Philippine Association of Securities Brokers and Dealers Inc.

AB Capital Securities, however, said domestic corporate fundamentals remain very positive with double digit earnings growth in the past several years and this is seen to continue until 2008.

Banks started releasing last week their first quarter results with most of them reporting a significant increase in their earnings.

Bank of the Philippine Islands (BPI) reported a 28 percent rise in net income to P3.2 billion, Metrobank (up 30 percent to P1.25 billion), Security Bank (up 40 percent to P758 million), and Rizal Commercial Banking Corp. (up 158 percent to P828 million).

"We have said before that the banking sector is our dark horse bet given expectations of lending recovery beginning this year. First quarter results continued to impress and this will definitely lead to upgrades (higher price-to-book values justified by rising ROE’s) moving ahead, justifying further upside in bank share prices," said AB Capital’s Erwin Balita.

Stock portal 2tradeasia.com said market players will continue to monitor economic trends in markets like the US and Europe, especially with the expected release of US personal income as well as home sales improvement, among others. For the week to May 4, the composite index fell 39.9 points or by 1.2 percent to 3,278.48. Average daily turnover last week fell to 4.17 billion. Shares worth P3.77 billion from 4.95 billion shares and P4.36 billion a week ago.