MANILA (Thomson Financial) - Philippine shares are expected to open slightly
higher on Monday buoyed by Wall Street's rally on growing optimism the U.S.
economy is healing and has dodged a dreaded recession.
However, gains will be capped by continuing worries over inflation amid
another record spike in oil prices.
Crude oil prices rose on Friday after three days of declines with investors
encouraged by the better-than-expected jobs report. The June Nymex crude oil
quote ended trade up $3.80 or 3.4 percent at $116.32 a barrel.
The Dow Industrial average gained 1.29 percent last week on a steady stream
of decent earnings reports and mostly benign economic data, raising optimism the
credit crisis that has pummelled stocks since last year is drawing to a close.
"The market may finally start to catch up after lagging behind other
regional markets last month," said Astro del Castillo, managing director of
First Grade Holdings.
Manila's 30-company composite index on Friday bucked gains in the region and
hit a new 18-month low, finishing down 26.82 points or 1.0 percent at 2,722.95.
Trading will remain cautious as investors await the first-quarter results
this week of the country's biggest companies, including Philippine Long Distance
Telephone Co (PLDT) and Globe Telecom Inc, and the inflation reading for April.
Economists said annual inflation in the Philippines likely accelerated to a
two-year high in April and is expected to keep rising in the next two months,
trimming chances that the central bank will resume cutting interest rates.
Inflation last month probably jumped to 6.8 percent, according to a Thomson
IFR Markets poll of economists. That would be the highest reading since February
2006 when inflation stood at 7.6 percent.
Economists are expecting higher food and energy costs to push inflation
higher in the second quarter, after the March reading jumped to a 21-month high
of 6.4 percent.
The government will release the April consumer price data on Tuesday.
rocel.felix@thomsonreuters.com
.
rf/ng
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