Philippine stocks rebound

MANILA, Philippines—Local stocks rebounded on Wednesday as bargain-hunters found selective equities tempting after a three-day slump, shrugging off overseas jitters caused by US Federal Reserve Ben Bernanke’s grim outlook on the US economy.

The main-share Philippine Stock Exchange index added 18.99 points, or 0.45 percent, to 4,255.44.

Justino Calaycay Jr., a dealer at Accord Capital Equities Corp., said the index had erased most of the previous session’s losses as investors continued to digest a better-than-expected 4.5 percent inflation rate for May. “Prior to the report, the market’s negativity had intensified anticipating a breach of the 5 percent level and raising the specter of another round of interest rate hike when the Bangko Sentral meets next week,” Calaycay said.

With the lower-than-expected inflation report for May, some economists now see the probability of the central bank pausing on its monetary tightening stance during its next policy rate setting on Thursday next week.

The PSEi found a strong support near 4,230 as investors picked up selected blue chips. All counters firmed up except for the financial counter.

But value turnover was still thin at P3.62 billion, reflecting lack of conviction to participate in the market in a big way.

Despite the overall index gain, overall market was still sluggish as the day’s 61 advancers were edged out by 67 decliners while 46 stocks were unchanged.

AGI, SM Investments, Lepanto A (open only to local investors), Metrobank, Megaworld, Lepanto B (open to both local and foreign investors), Aboitiz Power, EDC and DMCI led the index higher. Non-index stock East Asia Power was also up in heavy trade on a prospective backdoor listing of high-rise developer Century Properties.

On the other hand, index gains were tempered by losses incurred by Banco de Oro, SM Prime Holdings, Metro Pacific Investments, URC and BPI. San Miguel Corp. is also still battered by profit-taking after a strong performance last week.  PSE also traded lower.