PSEi breaches 6,000 mark

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MANILA, Philippines—The Philippine Stock Exchange index on Monday rallied past 6,000 for the first time in history, marking a record high for the fourth straight session as investors loaded up on equities in anticipation of another good year.

The PSEi gained 73.46 points, or 1.23 percent, to close at the day’s peak of 6,044.91, also a new intraday high record for the market, which bucked the profit-taking seen in most other markets in the region.

The rally was driven by ample liquidity in the financial system seeking higher yields alongside favorable economic numbers, said Bede Lovell Gomez, assistant vice president at investment house First Metro Investment Corp.

All sectors contributed to the upswing but the biggest gainers were mining/oil (+1.79 percent), financials (+1.57 percent), property (+1.45 percent) and holding firms (+1.24 percent).

Value turnover amounted to P8.5 billion while 107 advancers outnumbered 71 decliners. The biggest index gainers were Megaworld, BPI, MPI, SMC, Philex, AGI, Belle, Metrobank, ICTSI and SM Prime.

Meanwhile, PLDT (+0.45 percent) regained its position as the most valuable company in the local bourse with a market capitalization of P572.55 billion, a very narrow margin over challenger SM Investments’ P568.15 billion. SMIC, which announced an alliance with the Waltermart group of companies, rose 1.2 percent to P923 a share.

Gomez said last week’s favorable inflation report and a favorable sentiment across the region fueled the breakout past 6,000.

It was reported that inflation in December stood at 2.9 percent, slightly higher than the 2.8 percent in November. For the whole of 2012, inflation averaged 3.2 percent against 4.6 percent in 2011, thus hitting the lowest annual average in five years.

“Funds would like to position early. They are looking for the 12-month view,” Gomez said.

He said the local market was still a “buy” as the index would likely rise further to 6,800 this year, supported by a 20-percent average growth in corporate earnings. He said the market would likely tolerate a price-to-earnings (P/E) ratio of 17x this year, which means they will pay 17 times the amount of money the marker will make in 2013.

Ismael Cruz, president of IGC Securities, said the market was trading at the high-end of the historical P/E range of 12x to 18.5x. On average, the market trades at about 15.5x projected earnings.

Originally posted at 03:48 pm | Monday, January 07, 2012

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  • niceguy60

    Wow! 17x times your money for 2013. I would be very careful though. Spread your basket.

    • OFW_Investor

      17 x is the Price to Earnings  ratio. Means , if the company is earning 1 Peso per share, the market is pricing the stock at 17 pesos. This represents only the PSE Composite Index, there are still bargain stocks out there.

  • catalansbarce

    Just Beware. Remember Dow Jones two decades ago.., strong rally in the stock market
    but suddenly tumbles.

    • INQ_reader

      Filipinos are not as dumb as americans. Don’t worry.

  • http://www.facebook.com/weya.sago Weya Sago

    Be fearful when others are greedy and be greedy when others are fearful… Nonetheless this is amazing news!

  • http://pulse.yahoo.com/_QHGUJ3OJZAOIMBYYWTABNV2EEM Ai

    though this is a positive news, the same headline was seen during Ramos regime but failed to uplift the condition of the poor. This is nothing unless more jobs will be created – these are hot money that can easily be withdrawn by foreign investors the moment they want to.

    In line with this, the government should focus in manufacturing and agri-related projects to strengthen the foundation of our economy.

  • rodben

    Your suggestions Mr. JV Velarde sounds good but I heard doing business in countryside of some area in Pinas is very hard due to double taxation meaning the CPP-NPA are also asking revolutionary tax..

  • rodben

    Hope the CONTRACTUALIZATION OF LABOR  must now abolish so that the minimum wage earners will have a change to improve their lives too and the very high cost of food stuff will go down so that the masses can afford to buy enough food to eat too. And hope the gap of the rich and poor won’t widen too much  like in other country like Middle East, Arabic minimum earners  can  buy car for just two months salary, Singapore, Malaysia and some Socialist country in Europe like Norway, Denmark among others. Anyway CONGRATULATIONS TO THE ELITE PEOPLE ONCE AGAIN YOU’RE ONLY THE LUCKIEST PEOPLE IN PINAS.

  • http://profile.yahoo.com/XKJOFX5OP2765EGTA6CXLUSQZM Run High

    The investment grade for Philippine economy seems inevitable

  • http://www.facebook.com/profile.php?id=1099608493 Ren Parong

    there was a time when the index is in the 800’s. It was a time of coup d’etat lead by Honasan. Due to misguided principle perhaps.  The fact is the all time high and the all-time low belong to Aquinos.

  • roy roy

    Be very careful. Lots of these are coming from foreign investors/hedge funds. These are moneys looking for a new home after they “destroyed” their previous homes. They tend to create bubbles like the 2008 subprime mess.

    When your money reaches a conservative profit, cash in.

  • JV Velarde

    A historical high for PSEi means business is doing great. Meaning more jobs may soon be created. So besides the conditional cash transfer & other government programs the poor will have another opportunity to stay out of poverty, once jobs are created out of this healthy business indicator.

    Of course, the poor won’t become rich overnight with these, they have to help themselves too, work smartly inch by inch & positively on attaining their goals in life. With a government that is trying it’s best to rid itself of graft & corruption, poverty will soon be reduced. 

    Let’s just hope & pray the government next invest in technology, our country needs to be more efficient in food production, farming, fishing & infrastructure development particularly in the countryside. Provinces should start developing into food regions, tourism regions, manufacturing or industrial regions & new metro regions. 

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