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LOCAL share prices are expected to be dictated by fears of rising
inflation, spurred by high food prices, over the coming week,
dealers said last Friday.
“It’s a certainty that inflation levels will
spiral. This will weigh on corporate earnings,” said Astro del
Castillo of First Grade Holdings.
For the week to April 11, the composite index
fell 42.06 points or by 1.4 percent to 2,940.98 points.
Average daily turnover fell to 765 million
shares worth P2.55 million from 1.41 billion shares and P3.2 billion
in the previous week.
“The local equities market will continue to
move sideways [this] week as there is no clear direction from
overseas markets. Investors are taking this wait-and-see
attitude,” said Conrado Bate of Citiseconline.
“Volumes have really shrank and people would
rather sit on their cash—they know there is going to be along
period of a slowdown and there is no rush to get back to the
market,” he said.
The country’s annual inflation rate rose to a
21-month high of 6.4 percent in March as food prices surged.
“Investors are seeing the possibility of
accelerating inflation for the month of April. Aside from crude oil,
food prices are going up, and the low-income labor force will soon
ask for higher wages to cope with rising prices,” said Lawrence de
Leon of Accord Capital Equities.
Runaway inflation could put the Philippine
central bank under strong pressure to lift interest rates, after
lowering them four times in four consecutive months from October
last year.
-- AFP
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