Analysts said Finance Secretary Jose Isidro Camacho’s decision to quit his post will dampen investor sentiment as he is very well-respected by local and foreign businessmen. Camacho pushed major reforms in public finance, while lending his formidable expertise and insight to deliberations in the Cabinet, economic and fiscal planning bodies, and government corporate boards.
As the cabinet officer-in-charge of the government’s fiscal health, Camacho has struggled to reform the corruption-ridden internal revenue and customs bureaus, the state’s main tax collection agencies.
But Camacho, the former Philippine chief of Deutsche Bank, leaves after restoring fiscal discipline in the national budget, which overshot the official deficit target last year amid weak revenue inflows. His resignation takes effect on Nov. 30.
Last week, the main composite index closed at 1,334.30, down by 11.23 points or .84 percent week on week as international investors continued to sell down stocks, driven in part by weakness in regional and leading international markets, renewed terrorist activities abroad, and the lingering political issues.
"There is just too much uncertainties that investors wouldn’t want to be in stocks until the coast is clear," said Jose Vistan, research head of AB Capital.
Vistan said some investors are worried that if the current administration loses in the elections, it may derail the economic reforms already initiated.
"The main composite index fell early in the week and then recovered later. This is an indication that investors are being indecisive and weren’t willing to make major commitments," Vistan said.
BPI Securities said the market can still fall prey to renewed selling pressure if more bad news surfaces.
Bargain hunting support is likely to appear as the Phisix approaches the 1,300 level, BPI Securities said.
RCBC Securities said market weakness may persist as long as international investors continue to shift funds out of equities and into fixed income instruments. Interest rates have gradually been rising and there is a growing number of economists/analysts that see the US Fed raising interest rates by mid-2004. The ripple effects on global interest rates will undoubtedly have negative effects for bourses as well.
"Still, the oversold condition of the market suggests that a rebound may just be around the corner. We remain positive that sans another serious political/economic problem surfaces, the market may still stage the traditional Santa Claus rally," RCBC Securities said.
Vistan expects market leaders like PLDT, SM Prime Holdings (SMPH), Globe Telecoms Inc. and Ayala Corp. to lead the market higher again.
Another potential market mover is the third quarter gross domestic product (GDP) report, which is due next week. The consensus figure being anticipated is a four-percent growth year on year.
BPI Securities said the immediate up trendline resistance is at 1,336. "We are looking at the market consolidating within the 1,300 to 1,345 range. If the 1,300 level is breached, then we are looking at consolidation within the 1,265 to 1,300 range," BPI Securities said.