Trading seen to remain in tight range

Listless trading is seen to persist this week as investors digest a string of disappointing first quarter corporate earnings results while seeing more foreign funds flowing out of the local market.

Last week, the main-share Philippine Stock Exchange index (PSEi) shed 79.99 points or 1.42 percent to close on Friday at 5,541.95.

Joseph Roxas, president of Eagle Equities Inc., said the market might continue tra­ding in a tight range, within a 1-2 percent band.

“There will be more of a downward bias as first quarter earnings come out, because people realize that the second quarter will be much worse,” Roxas said.

The exception to the earnings downturn will likely come from food, telecom and power producers with take-or-pay arrangements, Roxas said.

Companies with business operations that are based outside of Metro Manila will likewise fare well during this time, he added.

Roxas also pointed out that with foreigners continuing to dump equities, the PSEi had been unable to take off.

Last week, the local stock market saw P3.26 billion worth of net foreign selling, larger than the P2.99 billion selling in the previous week. Since the start of the year, some P54.4 billion worth of foreign funds have flowed out.

Average volume likewise declined last week to P4.6 billion compared to P5.66 billion in the prior week.

For the first time since the Asian currency crisis, the government is now expecting the domestic economy to contract by 2 to 3.4 percent this year.—DORIS DUMLAO-ABADILLA INQ