Philippine stocks rise to new all-time high
The main-share Philippine Stock Exchange index gained 51.03 points, or 0.94 percent, to close at 5,500.58. A new intraday peak of 5,510 was also recorded.
“The stock market’s charge to new highs further validates the strength of the Philippine economy. We welcome the good news from overseas as a catalyst of investor confidence in the country,” PSE chief operating officer Roel A. Refran said.
The day’s upswing was led by the financial (+2.11 percent) and holding firm (+1.73 percent) counters. Value traded amounted to P6.83 billion. There were 89 advancers versus 76 decliners while 46 stocks were unchanged. JG Summit (+5.25 percent) and BPI (+3.21 percent) were the outperformers among index stocks. First Gen, AC, Jollibee, AGI, Semirara, SM Investments and Metro Pacific also significantly contributed to the PSEi’s gains. BDO, Metrobank, Meralco and EDC also traded higher.
“The spark in the PSEi looks fairly broad-based. Investors were picking up conglomerates that reported an acceleration in earnings growth in the third quarter 2012 such as JG Summit, SM Investments and Ayala Corp.,” said Jose Mari Lacson, head of research at stockbrokerage Campos Lanuza & Co.
Lacson noted that JG Summit saw its net profit jump 106.1 percent year on year in the third quarter on the back of dividend income from its PLDT stake while Ayala’s net income improved 10 percent over the same period as many of its noncore subsidiaries recovered. Net profit of SM Investments increased 14.9 percent with a recovery in retail sales and higher contribution from its banks.
Among second-liners, the outperformers were PNB (+11.69 percent) and Security Bank (+2.55 percent).
On the other hand, the PSEi’s gains were tempered by the decline of PLDT, Megaworld and URC.
Paul Joseph Garcia, senior vice president at Bank of the Philippine Islands, said the local stock market had more room to go up and target 5,600 by the end of the year and further to 6,500 by 2013.
“We expect the (Philippine) economy to grow higher next year and there may be a rebound in global economic growth led by China. With its new leadership in place, China’s growth may pick up pace,” Garcia said.
For 2013, Garcia said average corporate earnings in the Philippines might rise by at least 15 percent, supporting a further jump in the PSEi.
Investors also took their cue from an upbeat Wall Street trading overnight due to favorable US housing data, hopes that the United States would be able to address the so-called “fiscal cliff” and a series of mandated tax increases and spending cuts that could drastically reduce the US deficit but increase risks of recession in 2013.