Trading seen to remain lethargic this week

Unless a major development breaks out on the political front, the stock market is not expected to make wild swings but instead remain in a lethargic mood in the week ahead.

"We don’t expect any earth-shattering development in the next couple of days, just pieces of news here and there," a report by the web-based local investment guide PhilStocks.net said.

It added that the consolidation phase, which has characterized the market’s movement during the past couple of weeks, will persist "unless we get some sort of a catalyst to break the boredom."

Stocks finished flat last week as caution still prevailed in the local equities market. Trading was thin as the euphoria over the ouster of the Estrada administration quickly subsided and investors started to look for broad signs of direction on the future of the fragile economy and that of corporate earnings.

Analysts said that while support in the market has been quite positive, it has not been enough as at the close of the trading week, the Phisix had slipped 5.68 points or 0.33 percent week-on-week to 1,689.91.

"The ongoing challenge against the leadership of President Gloria Macapagal-Arroyo raised anxieties as there are those who believe that any adverse development can once again trigger an emotional swing," the PhilStocks report, quoting Wise Securities research head Jose Vistan Jr.

Deposed President Joseph Estrada had challenged before the Supreme Court the legitimacy of President Arroyo’s assumption into office, although her presidency has been widely recognized by local sectors and foreign governments.

However, as bad as the market looks with a lot of unfulfilled rallies and reactions, there are many underlying factors willing to come in, with the key pointing to the market’s ability to absorb seemingly negative news, Vistan said.

"Although the jury is still out on whether the economy will show its strength after the first half of this year, some investors are already taking a leap of faith that things will get better. Short-term problems are abberations when viewed from the long term perspective," the PhilStocks report said. – Conrado Diaz Jr.