Stocks seen trading higher

Local stocks are seen trading on the upside this week but gains will be capped by a heavy pipeline of liquidity-sapping equity deals, said veteran fund manager Wilson Sy.

Last week, the main-share Philippine Stock Exchange index firmed up by 10.67 points or 0.17 percent to close on Friday at 6,390.48.

“Our market is proving resilient, recovering even after the URC (Universal Robina Corp.) placement,” said Sy, director at equity fund management firm Philequity Management. Gokongwei-led JG Summit Holdings Inc. raised P12 billion from the sale of a 4.7-percent stake in food unit URC through an overnight private placement. JG Summit, which is seen raising funds to pay its investment in Manila Electric Co., sold 105 million common shares in URC at P115 a share, a 6.5-percent discount to Thursday’s closing price.

But Sy said large upcoming initial public offerings like those of Travellers International Hotel Group and Robinsons Retail

would likely be a drag to the market.

“But without those, it’s proving to be quite strong despite recent placements in URC, Emperador and RFM. At every chance, there’s some corporate going out to the equity market,” Sy said.

Uncertainties on US fiscal policy remain but this was somehow being offset by the recovery in recently battered emerging markets like India, which has seen the rupee rebound. “These factors balance off so we’re still positive,” Sy said, adding that the market would likely move higher this week until more of such equity placements come into play.

Sy said the JG Summit deal to buy SMC’s stake in Meralco had been good for the overall market. Doris C. Dumlao