Philippines shares are expected to get a boost this week from strong corporate results for the three months to March, offsetting continuing concerns over the government's fiscal health, dealers said. Congress remains deadlocked over a proposed bill to raise the value-added tax (VAT), a cornerstone of President Gloria Arroyo's bid to broaden the country's narrow tax base and avoid a potential debt default. However, dealers said investors are focussing on encouraging first quarter reports of key listed companies for the time being although the wider budget position will remain an issue.
"The market may continue to track higher in the coming sessions," said Jose Vistan of AB Capital Securities, noting easing concerns on interest rates will likely provide support.
The central bank decided Thursday to keep interest rates unchanged, citing as slight slowdown in inflation.
The central bank "noted that latest forecasts indicate that inflation may be levelling off and is likely to fall within the targeted 4.0-5.0 percent range in 2006 in the absence of further adverse shocks."
BPI Securities said in a note that gains towards the 1,900 points level suggests that the market may be on its way to test the next major resistance at 2,000.
"Corporate performances (to date) have generally been positive and some companies have expressed cautious optimism for the coming quarters," it added.
For the week to May 6, the Philippine Stock Exchange composite index rose 59.14 points or 3.18 percent to 1,913.77 points on Friday, its highest level since April 13.
Average daily volume fell to 572 million shares but average daily value rose to 914 million pesos (16.9 million dollars) compared to 738 million shares worth 886 million pesos in the previous week.
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