PSEi rallies on S&P credit rating upgrade

MANILA—Most local stock prices rallied on Friday as investors cheered a surprise upgrade of the Philippines’ sovereign credit rating by global credit watcher Standard & Poor’s.

The main-share Philippine Stock Exchange index racked up 82.05 points or 1.21 percent to close at 6,847.26, its best finish this year.

“The market sharply went up on account of the increase in credit rating from S&P, which means that we are now above minimum investment grade (rating) and further ahead of Indonesia,” said Manny Cruz, chief strategist at Asiasec Equities. “We are expecting continued flows from foreign funds given this development.”

S&P on Thursday raised its credit rating on the Philippine government to BBB from BBB- or one notch above the minimum investment grade level.

The market is now trading at a price to earnings ratio of about 19 times projected earnings for this year, a premium to the historical valuation of about 14 to 15 times earnings.

Turnover for the day was heavy at P11.89 billion. There were 116 advancers against 72 decliners while 35 stocks were unchanged.