Trading seen sluggish ahead of Easter break

Trading is expected to be sluggish this week as investors prefer to hold onto their cash ahead of the Easter break, analysts said.

In its online weekly report, BPI Securities said security concerns and the lack of new positive developments will likely keep investors sidelined.

"New domestic security concerns have provided investors an excuse to take profits as we approach the long Holy Week vacation. Government was able to resolve last Tuesday the crisis at the maximum security prison involving Abu Sayyaf members. However, the death of some Abu Sayyaf leaders raised fears of repercussions. There are reports that the Abu Sayyaf group would bomb select churches during the Holy Week," BPI Securities said.

Philippine markets will be closed on Thursday and Friday. Trading will resume on Monday.

BPI Securities said Congress’ failure to pass a long-awaited revenue measure that will raise the value-added tax rate before it goes on a three-week recess would dampen market sentiment.

BPI Securities said the rise in world oil prices may also weigh on consumer sentiment.

Last week, the Philippine composite index shed 87.11 points or 4.08 percent, closing at 2,050.28.

The listing of Manila Water Co. Inc. shares last Friday failed to temper the market’s fall despite strong buying interest from foreign investors.

Manila Water, the first water utility to be listed in the local bourse, was the most actively traded stock Friday, ending P0.40 higher than its offer price of P6.50.

Philippine Long Distance Telephone Co. was the second most active counter but its share price was down by P10 or 0.68 percent at P1,455.

Holcim PHils. fell P0.70 after the Court of Appeals issued a temporary restraining order enjoining the Securities and Exchange Commission from requiring Cemco Holdings to buy out Holcim’s minority shareholders.

Semirara Mining Corp. was down P6.50 or 15.29 percent to P36. Its parent firm DMCI Holdings likewise declined P0.40 to P3.50.

First Philippine Holdings was down P40 at P55.50 while Benpres Corp. fell P0.06 to P1.1

Property stocks also weighed on the market. SM Prime Holdings lost P0.40 to P8, Belle slid P0.12 to P1.38, Filinvest Land fell P0.08 to P1.76 and Metro Pacific Corp. dropped P0.03 to P0.53.

Only PNB managed to close higher. It was up P3 to P35 on reports that government, together with tobacco and beer magnate Lucio Tan will sell a majority stake in the firm before Sept. 16.

SM Investments Corp., the holding firm of the Sy family’s diverse businesses, ended its initial public offering Thursday. The IPO comprised 105 million new shares and 10 million existing shares offered to investors at P250 a piece. The shares are to be listed tomorrow.

BPI Securities views the current weakness as a "healthy correction as the market needs to consolidate its gains given the rise in prices."

"The market remains in consolidation. The Phisix failed to sustain the move back above the 2,100 psychological support and this suggests weakness. The Phisix is currently testing the trendline support of the upward channel (January 2005 to present) at 2046. If this support fails to hold, the market is likely to test the next support range at 1,987 to 2,000," BPI Securities said.