LAST week: It was practically good news for the stock market. Local stocks rallied for the third straight week as investors cheered the Bangko Sentral ng Pilipinas’ decision to cut overnight rates. The gains, however, were capped when the PSEi encountered resistance at the 3,800 level. At the end of the week, the index closed up 203.01 points or 5.68 percent week on week to 3,775.91. 

THIS week: Jonathan Ravelas, chief market strategist at BDO-EPCI Inc., said last week’s close implies that the market seems to be encountering resistance near the 3,800-3,820 levels.

“A break below the 3,750 level could call for further losses towards the 3,450 levels. However, should the 3,750 support level hold, a retest of the 3,820 level is expected,” he said.

AB Capital Securities senior analyst Jovis Vistan projects that the PSEi will respect the 3,800 resistance.

“Sentiments now are quite optimistic against the backdrop of a weakening global economy. This makes us believe that the market is indeed vulnerable to a correction. We may have seen the worst but our outlook remains cautious going forward,” Vistan said.

He added the market will also be looking at the US September employment report to see whether the August decline will continue or not. 

STOCKS to watch: Stock traders, who declined to be identified, meanwhile are betting on banking and services stocks. The rate cut, they said, will continue to encourage people to borrow money.  

Stock index climbs for 5th day 

THE Philippine stock index climbed for a fifth day, the longest winning streak in four months, after the central bank cut borrowing costs for the second time this year.

Metropolitan Bank & Trust Co. (Metrobank) led finance stocks higher on speculation lower-interest rates will boost economic growth, demand for loans and stock purchases. Megaworld Corp. and other builders rose after a property consultant said home prices climbed 14 percent in the second quarter.

“This removes whatever doubts some investors may have on the country’s economic outlook and the direction for stocks,’’ said Jerome Gonzalez, who helps manage $72 million at Manila-based PhilEquity Management Inc.

The Philippine Stock Exchange index added 0.45 point to close at 3,775.91, after earlier rising as much as 1 percent to 3,814.62, its highest ever. The measure, which last advanced this long during a seven-day climb in May, closed the week with a 5.7 percent gain.

Metrobank, the third-largest lender, jumped P3.50, or 5.9 percent, to P63, gaining 12 percent this week. ---Bloomberg

SM Investments Corp. (SMIC), the holding company of the SM Group’s various interests, is raising its capital expenditures in 2008 to P22 billion, up 10 percent from the P20-billion allotted this year.

Rockwell Land plans a Q1 IPO

THE Lopez-led Rockwell Land Corp. is going public by the first quarter of 2008.

In an interview, Benpres Holdings Corp. president and chief operating officer Angel S. Ong said the property developer, popular for its Rockwell Center in Makati City, has tapped Hong Kong-based investment banker CLSA to underwrite the initial share sale.

FILINVEST Development Corp. (FDC) soared 34.615 percent to a 30-day high of P7 Friday, from its month’s low of P5.20 on September 25. It closed at its opening price and session’s low of P6.70.

Remember when tycoon Lucio Tan predicted the foreign exchange rate would be P40 to the dollar by 2010? That was the time the peso was reaching P60 and everybody thought it would go further north to P70 or P80.