Market seen to remain sluggish this wk

Has the stockmarket finally bottomed out? After just three straight days on the rise -- and at a tempered pace at that -- the Phisix, analysts believe, would again be treading on rough roads this week even as a bombed-out nation pins its hopes on an end to the armed conflict in Mindanao.

Finding support at the 1400 mark, the Phisix cradled at a 19-month low of 1404.67 last Tuesday after a series of mall bombings in Metro Manila and worries over another round of interest rate hikes had investors shying away from the equities market.

But as prices dropped to attractively low levels, major players -- particularly the government financial institutions (GFIs) led by the state pension funds -- soon stepped right in and started accumulating their choice blue chips, igniting a mild rally at the bourse.

Among the stocks in the buy order were index heavyweights PLDT, Meralco, San Miguel, Benpres Holdings, Ayala Land and SM Prime Holdings. Outside the Phisix, which lists a wide mix of 30 stocks, those making waves were Canadian insurers Manulife and Sunlife, and Internet firms PhilWeb and iVantage.

The technical rebound initially isolated the Philippines from the global downtrend, particularly in the keenly-monitored Dow Jones and Nasdaq counters, where lingering concerns over interest rate increases continue to downplay investor sentiment.

And with the highly-touted seasonal kick ushering in the rainy season by June, there seem to be more reasons to take positions at the stockmarket once more. Late last week, government negotiators forged a breakthrough meeting with the Muslim extremist group Abu Sayyaf holding 21 foreign hostages to possibly ease the tension that also held investors' funds captive.

On the economic front, the absence of any bomb attacks, thanks to heightened security and increased surveillance, has likewise calmed down attacks on the peso, which strenghtened back to the P42:$1 range after breaching past P43 to a dollar.

This week, government statisticians will release the economic figures for the first quarter, although analysts have said the anticipated 3.5 percent growth in the gross domestic output (GDP) has long been factored in by the market.

"We're seeing a consolidation between the 1400 to 1450 levels this week," Wellex Global Equities research head James Lago said. "There are no new fundamentals that could drive up the market hard, and the same concerns we've had over the past weeks are still there."