Shares seen flat as inflation fears persist
By Enrico dela Cruz
Thomson Financial
First Posted 08:42:00 07/04/2008
Filed Under: Stock Activity, Markets & Exchanges
MANILA, Philippines -- Shares may open flat on Friday with inflation-wary investors possibly taking a breather following five days of losses but resisting the temptation to pick up bargains.
Consumer prices jumped 11.4 percent in June from a year earlier, surging above the central bank's forecast range of 10.4-11.2 percent, Socioeconomic Planning Secretary Augusto Santos said on Friday.
The central bank, which has been in inflation-fighting mode, expected annual inflation to hit as high as 11.2 percent in June and to peak in the third quarter before slipping back to single-digit levels in 2009.
"There is a remote possibility that we could see a dead cat bounce today," said Jose Vistan Jr., research director at AB Capital Securities, noting that almost all stocks were trading at "extraordinarily oversold levels."
"But as we said, any bounce will most likely fall short and will just be technical rebounds within a bear market," Vistan said.
Manila's 30-company composite index lost 54.06 points or 2.3 percent to 2,339.84 on Thursday.
Investors will continue to keep an eye on economic data here and abroad, he said.
"The outlook is scary as we don't see any near term solution to the current global financial crisis. Central banks across the globe are helpless against inflation as the fundamentals of oil point to higher prices," Vistan said.
Oil continued its record-breaking run, stoking fears about runaway inflation and bolstering expectations of higher borrowing costs and weaker economic growth across the globe. Light, sweet crude settled up $1.72 at a record $145.29 per barrel on the New York Mercantile Exchange on Thursday after trading as high as $145.85 -- also a new high.
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