Trading to remain choppy this week, say analysts

MANILA, Philippines - Trading for the week is expected to remain choppy with a slight positive bias as investors await the signing into law of the $787-billion US economic stimulus bill.

Last week, the main composite index fell 22.82 points or 1.2 percent to close at 1,919.66. Turnover reached P17 billion.

“The market has been moving in an intermediate uptrend, having higher lows since hitting its October 2008 bottom. It has managed to immediately bounce up after testing its 1,830 support level. The strength of the market in the midst of all the bad economic and corporate news shows that so much negativity has been priced in already,” said AB Capital Securities in its weekly market report.

AB Capital Securities has advised investors to take defensive stocks with no end in sight to the troubles of economies worldwide.

In the US, 3.6 million jobs were lost due to the deepening global economic crisis.

“We have all been privy to the closure and fall into bankruptcy of what we once considered as well-heeled and firmly established, reputable institutions. These among a host of others, like a slowdown in manufacturing and production activity, inflation, record-level jobless claims, falling home values, etc., strengthens the proposition to stay out of equities for the time being until the situation stabilizes,” said Jun Calaycay of Accord Capital Equities.

Biggest market gainers last week were Manila Electric Co., Petron Corp. and San Miguel Corp. In the mining sector, the big winners were Philex Mining which rose 8.7 percent and Apex Mining by 25 percent.

Meralco caught the attention of investors due to rumors of a looming proxy war between its two major shareholders — the Lopez family and Southeast Asia’s largest food and drink group San Miguel Corp. (SMC).

Meralco rose 19.4 percent while San Miguel A went up 10 percent last week.