Market expected to move up this week

MANILA, Philippines - The local stock market is expected to move up this week as investors load up on shares of blue chips and storied second liners following a Lenten-shortened trading week.

The PSE Index rose nearly 30 points or 0.70 percent to close at 4,274.77 last Wednesday, completely erasing the previous day’s drop on increased net foreign inflow. It was the index’s highest close since November last year and is less than three percent short of the all-time closing high of 4,397.30 of Nov. 4, 2010.

The main composite index or the PSEi has gained 76.63 points or 1.75 percent so far this year. On a year-to-date, traditional laggards financial and service sectors remain in the red.

Accord Capital Equities Inc.’s Jun Calaycay said he expects the stock market to sustain its upward trajectory on good first quarter results of some listed companies.

Calaycay said first quarter earnings results have been encouraging with a couple of companies reporting significant year-on-year growth. “This has eased growing concerns over possibly weaker Q1 earnings given the unanticipated rise in geopolitical and economic risks posed by the conflicts in the Arab region and the natural disasters in Japan,” he said.

“We can expect sentiments to remain positive moving forward, founded upon another round of good earnings. This, even as the technical measures insists on a pullback,” Calaycay said.

Calaycay said investors will continue to take their cues from developments overseas. US and Asian stocks posted hefty gains last week on the back of strong housing numbers and better than expected earnings.

He said SMC’s pricing of its shares at P110.331 per share is expected to shore up investor confidence. The final offer price is a steep discount to SMC’s closing price of P153 each share, when it was last traded on April 12.

The selling shareholders, SMC and Top Frontier, have raised $900 million, broken down into $600 million in exchangeable bonds and $300 million in common shares during the roadshows and book building process in Southeast Asia and the United Kingdom.