Stocks near all-time high territory

The local stock barometer yesterday pierced through the 8,100 level for the first time this year, powered by upbeat regional markets as well as optimism on local corporate earnings and the upcoming inaugural State-of-the-Nation-Address of President Duterte.

After a rough start, the Philippine Stock Exchange index gained 50.55 points or 0.63 percent to close at 8,102.30—its best finish in 15 months. The main index is now hovering close to its record high of 8,127.48 recorded on April 10 last year.

“The market made a last minute push on very good volume and looks like it may form a new all-time high in the next few sessions,” said Manny Lisbona, head of PNB Securities.

“Many investors are placing their bets in anticipation of the second quarter 2016 earnings reports and optimism to President Duterte’s first SONA,” he said.

Duterte is set to address the joint session of Congress on Monday.

Meanwhile, the second quarter earnings reports of listed companies are expected to trickle in starting next week.  Robust economic growth in the first half, partly fuelled by election spending, is seen to benefit corporate earnings.

“Valuation concerns may temper the market’s rise, but if earnings prove to be good the market may have some more steam to form a new high,” Lisbona said.

Joseph Roxas, president of Eagle Securities, yesterday said it was a breakout period for the market.  The index has now gained 16.54 percent since the start of the year.

“We see local and foreign investor confidence getting a boost from expectations that the Philippine economy will continue to outperform its peers.  This should hopefully reflect in corporate performance,” said PSE president Hans Sicat.

The property counter led the day’s rise with its 1.35 percent gain.  Only the mining/oil counter ended lower.

Value turnover was heavy at P10.45 billion.  Foreign investors were in a net buying position amounting to P1.32 billion.

Elsewhere in the region, stock markets were mostly higher on bets of stimulus from major central banks across the globe.

At the local bourse, market breadth was negative as there were 118 decliners that beat 78 advancers, suggesting that investors mostly gobbled up large-cap stocks.

Investors loaded up on shares of the country’s largest property developer SM Prime, local banking giant Metrobank, power generation firm First Gen and property firm Megaworld.

Ayala Corp., SM Investments and Jollibee also firmed up.

Outside of PSEi stocks, investors also bought more shares of newly listed cement firm Cemex (+6.75 percent), retailer Puregold (+0.52 percent) and construction firm Megawide (+0.21 percent). These companies all advanced in heavy volume.

On the other hand, Ayala Land, Universal Robina, Banco de Oro, Globe Telecom and PLDT slipped.

Outside the PSEi, there was also profit-taking on Alterra, which slid by 38.12 percent after backdoor-listing rumors drove shares higher in previous days.  Cirtek also fell by 1.44 percent.

Consensus points out to a growth in local corporate earnings of 10.8 percent this year, improving from the 7.4 percent growth in 2015.