Mart seen going into consolidation

MANILA, Philippines - The local stock market could enter consolidation mode this week with few incentives to chase shares as investors await fresh cues from overseas markets.

“After reaching high levels last year, the PSEi may pause and consolidate. The index is encountering a resistance at 4,250. Without compelling and new stories to encourage the markets and investors, the PSEi may not easily break the said level,” said AB Capital Securities Corp.’s Maria Arlysa E. Narciso.

Last week, the Philippine Stock Exchange index finished on a positive territory at 4,202.52 or an increase of only 0.03 percent or 1.38 points.

“Although the change is minimal, it is not indicative of a sluggish performance for a prolonged time. As 2011 is welcomed, investors are feeling their way for any indication of how the market and the economy will fare this year. So far, the signs are encouraging,” Narciso said.

Hogging the limelight last week were small cap issues Cyber Bay Corp. and Leisure Resorts World Corp. (LRWC), rising 52 percent and 48.4 percent, respectively.

Cyberbay, which is headed by streetsmart San Miguel Corp. president Ramon S. Ang, had a strong run-up last week on speculation it was pursing a project involving a property along the reclaimed Manila Bay. It reached a 52-week high of P1.03 before closing at P1.02 each share Friday compared with only P0.67 a week earlier.

LRWC, meanwhile, continued to attract investors, climbing to P5.64 each share as it goes full blast on its planned multi-billion peso integrated leisure and entertainment complex. Its shares reached an all-time high of P6 apiece last week.

Other stocks that took centerstage were Manila Electric Co. and San Miguel Corp., which gained 8.8 percent and 5.7 percent, respectively.

Meralco is pushing for an upgrade of its distribution network, which would entail P45 billion in funding.With the delay in approval of a rate increase, the firm may ask for higher rates to make up for the under recoveries.