MANILA, 14 July — The Manila bourse improved by over 3 percent last week as stock market investors lapped up shares, whose prices had fallen during the previous week’s debacle. The largely technical improvement showed in the composite index, which gained 3.75 percent or 41.97 points before closing at 1,161.69 points.
Market analysts said, however, that this was contained to a few choice stocks while others continued to face selling pressure amid an absence of fresh leads to spur active buying interest.
“It’s a technical rebound. It also seems like some investors are switching out of the Lopez companies and into other companies with no debt problems,” Enrique Santa Ana, associate director for sales at DBS Vickers Securities, said. “But the volume remains thin which means there is still a total disinterest in the market,” he added.
He said he was not certain if the rally would continue because of the remaining thin volume. “The sentiment (was) mixed given the lack of fresh leads. Some investors came back in to pick up bargains while others cashed in on recent gains,” said Mark Alan Canizares of Citiseconline.com.
Analysts said lingering concerns about the budget deficit and the political infighting within the Arroyo administration also kept most investors out of the market.
BPI Securities Assistant Vice President Spencer Yap said investors would likely stay on the sidelines awaiting the release of first half corporate earnings results.
AB Capital Securities analyst Jose Vistan Jr. said trading last week started out quiet “after the volatile sessions last week.” However, he said potential gains were offset as the market continued “to be hounded by the fiscal deficit and the latest economic news on (declining) foreign exchange reserves and the rise in non-performing loans.”
BPI Securities Corp analyst Roberto Cano said the market continued to be weighed down by concerns over the budget deficit and the prospect of higher rates, and by political concerns due to the Senate deadlock and the resignation of Vice President Teofisto Guingona as Foreign Affairs Secretary.
“Whether or not succeeding support levels will be respected will depend on a number of factors, among which is an end to foreign selling and some good economic and corporate news,” Cano said.
Vistan said the market last week was “torn between technicals and fundamentals.” “Investors are still cautious, uncertain if this rally can be sustained,” BPI Cano added.
“Last week’s rally remains suspect since the value turnover was thin. It needs a broader participation from investors and a series of positive news to change the prevailing negative sentiment,” he said.
