Bargain hunters keep Philippine stocks up

MANILA, Philippines – Bargain hunters snapped up blue chips led by mining firms and conglomerates on Thursday to shore up the main local stocks index back to the 4,400 level, shrugging off external concerns on the US and Europe for the meantime.

The Philippine Stock Exchange index jumped by 63.27 points, or 1.46 percent, to finish at 4,403.54.

The index was on an uptrend throughout the day but the steepest rise occurred near the end of trading. All counters were up. Mining/oil and holding firms led the day’s rally, with their respective counters rising by 2.9 percent and 1.7 percent.

Buying on index heavyweight Philippine Long Distance Telephone Company (PLDT) also sharply boosted the index toward the end of the session. Shares of the telecom giant jumped by 1.6 percent, or P38, to finish at P2,346.

Jose Mari Lacson, head of research at Campos Lanuza & Co., said investors saw good value from PLDT after shares were heavily sold down in the last two weeks. “PLDT’s dividends are coming up at the end of the month which means it’s cheaper on a yield basis so there are a lot of bargain hunters,” Lacson said.

Bargain-hunting was likewise behind the buying on Lepanto, SM Investments and other index issues, Lacson said.  Other index gainers were EDC, Metrobank, Philex, Security Bank, Banco de Oro, AGI, Aboitiz Power and BPI.

San Miguel shares were also up following the announcement of a deal to acquire the downstream petroleum businesses of American oil and gas giant Exxon Mobil in Malaysia.

Non-index stocks Boulevard Holdings, Zeus, RCBC, ORE, Manila Mining and AGP also traded higher in heavy volume.

ICTSI was the only stock in the day’s active list that traded in the red.

“Investors may have taken a flat US market as an early signal pessimism in that economy is dissipating. This gets an added boost as Fitch Ratings joined Moody’s Investors Services in keeping the US at a top AAA rating, leaving only S&P with the downgrade. This should ease some of the concerns, leaving the onus on the European economic zone to come up with a viable and acceptable solution, and take action to smooth markets’ ruffled feathers. If another recessionary cycle is to come, it will most probably originate from that region,” said Justino Calaycay Jr., a dealer at Accord Capital Equities Corp.

Value turnover at the local market amounted to P5.07 billion.  There were 89 advancers that outnumbered 46 decliners while 44 stocks were unchanged.

Calaycay said the local market breadth had turned positive but was not enough to overturn the previous session’s negative spread. Nevertheless, he said the restoration of the index above the 4,400 line “should invite attention, adding further proof on the resiliency of domestic equity issues.”

He said the next resistance would be at 4,430-4,450 band while support would be at 4,370-4,390.