June 8, 2001

PROFITEERING

Today's market had investors looking to ride the rallies of some outperforming stocks, at least at the start. Coming off a 17.13 gain yesterday, index stocks zoomed ahead after the opening bell, going up by almost 18 points. You have ICT jumping ahead by 10%, CBC by 7%, BPC by 6%, MEG by 5% and even ALI by 4%. Not a lot of those closed at their respective highs. By the end of trading, the market just held on to a 3.85 point gain.

But the market never looked bleak. With PLDT gaining another P20 in a show of resurgence this week, 43 other issues managed to shore up their values, while only 29 succumbed to weakness. Apart from PLDT, a host of other major blue chips attracted much public interest. The likes of MBT, BPI, ALI, ICT, SLC, PCOR and BPC were among the heaviest traded gainers. MERB however, remained weak and lost P0.5 to P55. It was joined in the red by erstwhile highflier FLI which fell victim to profit taking. Coming off a P2.36 close yesterday, FLI quickly raced to P2.42, until profit takers drove it down to its day low of P2.34, where it settled.

Over the past week, the market has been favoring a number of selected stocks which perhaps would explain the greater than average volume today (+P600mn). Without much action in the past months, it would be reasonable to expect the average investor to milk this series for its worth. The prospects for power companies based on the passage of the power bill at this point is speculative of course. Bidders for NPC, foreign investors seeking tie-ups with Meralco and AEV, and improved operating efficiencies are all still well in the horizon. Passage of a law and actual implementation are two different animals. Still, expect investors to continue this flurry of trading in the name of the power bill.

As for the collective market though, the picture can't be that exciting. The present index level is as good as spot as any for inertia to seep in. On a technical standpoint, the index seems to be in-between extremes. So at this point, if you're looking for some action, be the average investor and ride this current wave.