Philippine stocks soar to new high on trading of PLDT shares

MANILA, Philippines—The main local stock market index soared to a new all-time high on Wednesday as investors gobbled up shares of selected large-cap companies led by telecom giant Philippine Long Distance Telephone Co.

The main-share Philippine Stock Exchange index surged by 34.86 points, or 0.75 percent, to finish at 4,677.62.  This edged out the local stock market barometer’s previous peak of 4,648.11 posted Thursday last week.

Ramon Garcia, president of RTG & Co., said the upswing was due to “good bottom lines for issues plus positive trends in US and European economies.”

Garcia said he had been expecting the market to reach new heights in December 2011.  “I look forward for the index to go higher,” he said.

“The litany of good news continues to be savored by investors. Positive economic data overseas and renewed domestic confidence contributed to the optimism of market participants,” said Astro del Castillo, managing director at First Grade Holdings.

The day’s upswing was led by the services counter, which surged by 1.8 percent on the back of PLDT’s strong gains.

“The market reached a new high today but the legs of today’s rally were running mostly on one stock – PLDT.  Unfortunately, the valuations of PLDT already appear to be toppish so any market gains driven by the stock over the course of the week will be mostly due to momentum. If the rally is to be sustained, other blue chips will have to chip in,” said Jose Mari Lacson, head of research at Campos Lanuza & Co.

PLDT rallied by 2.8 percent to close at P2,826 per share. The telco is now close to the 52-week high of P2,860 hit last week.  PLDT has a 16.6 percent weight on the PSEi, the heaviest among local blue chips.

The telco has become very interesting especially for foreign investors recently on the back of an attractive dividend yield play amid a low interest-rate environment.

Value turnover amounted to P6.78 billion. Despite the overall index gain the 61 advancers were outnumbered by 107 decliners, indicating selective rather than broad-based buying.

Holding firms and property issues also helped perk up the market.

Apart from PLDT, AGI, JG Summit, SMIC, ALI, RLC, Globe and AP supported the PSEi’s rise to new heights. NiHao and Security Bank were also up in heavy trade.

The financial, industrial and mining/oil counters ended in negative territory.

The share price decline of SMC, EDC, ICTSI and Philex trimmed the rise of the main index.

The day’s most actively traded company was Petron, whose shares fell by nearly 15 percent to P11.32 per share on news of a discounted sale of a substantial block held by the company’s retirement fund.

Shares of Lepanto A (open only to local investors) and B (open to all) also faltered on profit-taking.

Meanwhile, the day’s upswing was supported by a benign global financial environment. Wall Street reopened in a positive mood on Tuesday after a long weekend on news that debt auctions by Spain, Greece and Europe’s bailout fund proceeded smoothly despite recent credit rating downgrades.  Investors also took heart from indications of a soft landing for China, which reported a better-than-expected economic growth of 8.9 percent in the fourth quarter.