Aboitiz Power listing seen to boost market

The stock market is seen to likely trade on the upside early this week as investors’ attention shift to the listing of Aboitiz Power Corp. on the exchange today, analysts said.

“Attention might shift early this week to Aboitiz Power’s listing, which might also benefit other power-related firms like Meralco and First Philippine Holdings Corp.,” said investment stock portal 2tradeasia.com.

Aboitiz Power sold 1.7 billion shares in both local and international markets at P5.80 per share. It intends to use proceeds from the issue to invest at least P9 billion for its expansion over the next two years, with its capital expenditure budget for 2007 amounting to P2.68 billion and P5.33 billion for 2008.

Last week, the main composite index gained 27 points or 0.72 percent week on week to close at 3,786.02, mainly driven by the reduction in benchmark interest rates from 7.5 percent to six percent.

2tradeasia.com said the market may trade at a range of 3,770-3,820 as domestic players check for other issues that have commendable upside potentials and minimal downside risks.

Wall Street’s overnight improvement Friday as a result of acquisitions might provide support, although some would also credit the peso’s recent strength vis-à-vis the greenback lately,” 2tradeasia.com said.

Last week’s top gainers were Semirara Corp. rising by 15.9 percent at P40, Manila Water gaining 9.8 percent at P14, Benpres Holdings Corp. (up 9.6 percent at P5.70), ICTSI (up 8.8 percent P31) and DMCI Holdings (up 7.7 percent at P9.80).

2tradeasia.com said “ local monetary authorities’ move in reducing key policy rates by 150 basis points to six percent overnight borrowing, and 170 bps to eight percent for lending, augurs well in supporting improved lending operations and facilitate smoother capex rollout for listed companies for the remaining semester this year.”

“Inflation data remain benign and foreign exchange rate trends are within comfortable zones. Although concerns were earlier raised on fiscal planners’ ability in meeting this year’s budget gap target, hopes are not lost given privatization undertakings that are expected to catapult improved liquidity in equities this year. So long as this trend is maintained, we are looking at upward re-ratings in earnings per share estimates (EPS) for the ensuing months of 2007,” 2tradeasia.com added.

2tradeasia.com said the market could be well-supported by improved turnover in the coming sessions given the roster of expected initial public offerings (IPOs) and equity calls of companies, including GMA Network Inc. and Vista Land & Lifescapes Inc.