MANILA (Thomson Financial) - Philippine shares closed higher on Friday on
bargain-hunting after investors snapped up recently battered stocks.
"Investors continued their cherry-picking of stocks, but the market had a
hard time trekking higher, indicating the tentativeness of investors' (stance)
due to uncertainties," said Astro del Castillo, managing director at First Grade
Holdings.
Trading was cautious throughout the session, with investors opting to wait
for the next batch of earnings reports before making any big moves, hoping the
numbers would be strong enough to support a sustainable rally despite persistent
concerns over rising inflation.
Investors also digested economic data released earlier by the government,
which showed Philippine exports fell 6.8 percent in March from a year ago due to
weak global demand for electronic products. For the first quarter, overall
exports rose a modest 2.7 percent, providing a clue about how the economy
performed during the period.
"There's not much action today. There are a lot of reasons for investors to
be cautious," said Lawrence de Leon, analyst at Accord Capital Equities.
Manila's 30-company composite index closed up 18.80 points or 0.7 percent at
2,779.42, after moving between 2,759.01 and 2,787.61. The benchmark index was up
2.1 percent from the previous week.
The broader all-share index gained 9.09 points or 0.5 percent at 1,732.77
There were 68 advancers, 26 decliners, while 65 stocks ended flat.
A total of 1.2 billion shares worth 3.5 billion pesos changed hands.
"We can expect some follow-through buying in the early part of next week as
stocks have become attractive, but then the market will go back to fundamentals.
We may see some more consolidation, depending on economic data and earnings
reports," said Francisco Liboro, president of PCCI Securities.
Index leader Philippine Long Distance Telephone Co. inched up 0.2 percent to
2,595 pesos.
Power distributor Manila Electric Co. (Meralco) closed up 5.2 percent at 71
pesos, rebounding from a selloff earlier this week after at least two brokerages
downgraded the stock. The downgrades were made amid mounting political pressure
on the power distributor to lower its tariffs and after one of its major
shareholders sought a change in management.
"The selling in Meralco was overdone and it (the stock) is very attrractive
at its current price," said Jose Vistan Jr. research director At AB Capital
Securities.
Credit Suisse said earlier it had downgraded Meralco to underperform from
neutral with a new target price of 55 pesos, down from 84 pesos previously,
citing "heightened political pressure to control electricity prices."
Given this pressure from the government, Credit Suisse cut its earnings
forecasts for Meralco on the assumption that the company would be unable to
raise its rates until the first half of 2009.
Macquarie Research Equities lowered its target price for Meralco to 78 pesos
from 108 pesos, downgraded the stock to neutral and removed it from its list of
top picks in the Philippines.
Macquarie said the Government Service Insurance System's (GSIS) push for a
change in management "introduces an element of uncertainty."
GSIS, the pension fund of government employees and owner of a 24 percent
stake in Meralco, has been complaining about a lack of transparency in the
fund's management.
($1 = 42.60 pesos)
rocel.felix@thomsonreuters.com
.
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