'Lethargic' trading seen in short business week

Posted at 10/28/12 8:03 PM

MANILA, Philippines -- Analysts expect to see lethargic trading this coming week, which will only have three trading sessions from Monday to Wednesday; there will be no trading on Thursday (for the All Saints’ Day holiday) and Friday (a special non-working day).

“Next week’s market movement may be limited in terms of volume participation due to long holiday starting Thursday in observance of all souls and saints day,” BPI Securities Inc. said.

COL Financial Group, citing technical indicators, advised investors to “take profits or lighten” their positions, based on a report dated October 25. COL Financial saw support levels at 5,350 to 5,250 and resistance levels at 5,500 to 5,350.

BPI said key US economic indicators due next week include jobless claims, consumer confidence and ISM Manufacturing.

COL Financial’s investment guide dated October 24 was little changed from the previous week, with recommendations centered on corporations expected to benefit from the country’s stable economic fundamentals.

The brokerage firm kept buy ratings on the country’s largest as well as infrastructure firms like Ayala Corp., EEI Corp., Metro Pacific Investments Corp. and water utility Maynilad Water Services Inc. It also had buy ratings on power-generation company First Gen Corp. and parent First Philippine Holdings Corp.

Last week, the Philippine Stock Exchange Index declined against the backdrop of uneven economic and corporate indicators abroad and as investors locked in gains ahead of the long weekend.

The benchmark index dropped about half a percent to 5,405.16 points week-on-week, although the benchmark measure closed up 0.12% on Thursday in anticipation of an interest rate cut.

The Bangko Sentral ng Pilipinas did just that when it announced a 25-basis- point cut following its regular policy meeting late Thursday. This means the overnight borrowing rate now stands at 3.5% while overnight lending is at 5.5%.

BPI Securities Corp. said in a research note that worries overseas still weighed on investors’ minds as it cited “lower US corporate earnings, falling commodity prices and concerns about Spain’s weak economy.”

Still, some firms ended the week strong, led by the successful trading debut of Coal Asia Holdings Inc., which raised P800 million to help finance the exploration and development of coal mines in Mindanao. Coal Asia ended its first trading day up 50% to P1.50 each and as of Thursday has held on to those gains.

In the US, stocks were mainly lower for the week due to disappointing corporate earnings but still managed to post mixed results by Friday. The Dow Jones Industrial Average was up 0.03% to 13,107.21 on Friday while the Nasdaq also gained 0.06%. The S&P 500 was down 0.07% on Friday.