Amid the absence of significant developments and listless benchmark international markets, the main market gauge remained in a tight trading range for most of the week.
Investors opted to take a cautious stance, owing to lingering investor worries on the impact of persistently high crude oil prices on corporate profits, and slowing export growth in August.
The continuing political noise, with left-wing groups accusing the current President of planning to declare martial law in order to remain in power, has also worried market players even if government has steadfastly denied these allegations.
Week-on-week, the Philippine Stock Exchange Composite Index (Phisix) was nearly flat, rising by 0.86 points to end at 1953.15.
Weekly value transactions equaled
R5.09 billion, an improvement from the R3.64 billion last week. Continuing to provide a strong support to the market were foreign buying activities.
International investors were net buyers for the fourth consecutive week and Friday reflected the 21st consecutive day that they were net purchasers. PLDT closed at
R1,680, higher by R20.
During the week, Moody’s investors Service stated that it has put the range of the telecoms giant on review for a possible upgrade following an improvement in the company’s financial risk profile.
Ayala Land gained 3 percent for the week, rising to a high of
R9.0 but cash calls from short-term market players caused the stock to close at R8.90. Its parent firm, Ayala Corp., however closed flat at R292.50.
On the corporate arena, Megaworld has reportedly earmarked about
R7 billion for its project, called the Newport City, in its 25-hectare property at the Villamor Air Base in Pasay City. The project includes the construction of a world-class hotel, entertainment and sports facilities beside the 60-hectare, 18-hold Villamor golf course.
A 3.2 hectare residential resort and an entertainment center will also be included in the project. Megaworld shares fell
R0.04 during the week to end at R1.36.
Meanwhile, the National Economic and Development Authority (NEDA) reported that for the month of August, export earnings rose by 0.8 percent to $3.5 billion, a decline from the previous month’s 11.4 percent growth. For the first eight months of the year, total exports rose to $26.4 billion, 4.1 percent higher compared to the same period in 2004.
The deceleration can be attributed to the fall in exports of petroleum products, which fell by 16.3 percent. However, there is optimism that exports could still improve in the coming months as demand for electronic products from the country’s main export market, the United States, will recover even with hurricanes Katrina and Rita.
Market action for the coming weeks will be determined by expectations on Q305 corporate earnings reports, which are anticipated to trickle in by month’s end, and movements in global crude oil prices. While the market has gradually discounted the political issues, investors continue to remain wary. The Supreme Court’s decision on the EVAT issue will also have an important effect on the market.
