A Filipino priest (C) officiates a mass in front of the electronic board to mark the first trading day of the year at the Philippine Stock Exchange on January 2. AFP
MANILA, Philippines—The local stock index skyrocketed to a new record high on Thursday, breaching the 4,700 level on the back of yield-seeking foreign funds, which have now placed the Philippines on their radar screen.
The main-share Philippine Stock Exchange index surged by another 22.75 points, or 0.49 percent, to finish at 4,700.37. The finish was a bit lower than the intra-day high but managed to close at a new all-time high for the second day in a row.
“The interest in the Philippines has been extraordinary at the moment,” said HSBC Philippines president Tony Cripps when asked whether it was becoming scary to invest in a high-flying equities market.
“Just because the market is hitting new highs doesn’t mean it’s a potential bubble of any kind at all. The valuations are pretty reasonable. There’s more foreign money going into the growth story in the Philippines and that’s why you see the trend continuing upwards. As they say, the trend is your friend and the trends here are very positive still unless there’s a major calamity in the global economy this year, which could affect everything but which we don’t think will be the case,” Cripps said.
Paul Joseph Garcia, senior vice president and equity fund manager at Bank of the Philippine Islands, said the market was on track to test the 5,000 level.
“The locals are still selling on strength, looking for pullback but the market is being driven by foreign funds,” Garcia said, adding that foreign funds were rebalancing their portfolios and taking a fresh position in the Philippines.
“Last year, we outperformed the rest of Asia except the US. Southeast Asia is becoming more attractive and from out of the blue, we’re now in the limelight. We’re suddenly on their radar screen,” Garcia said.
All counters ended in positive territory led by the mining/oil counter, which rebounded by 1.92 percent.
PLDT, Philex, SMIC, EDC, ALI, BPI and SMC contributed most to the PSEi’s rise. Other stocks that edged higher in heavy trade were NiHao, Petron, Lepanto A (open only to local investors), PNB, Security Bank and Wellex.
Petron bounced by 1.6 percent to finish at P11.50 per share after bargain hunters picked up its shares after digesting news that its retirement fund was selling a big block at P11 per share. The transaction is seen widening Petron’s stock trading liquidity and making it compliant with the 10 percent minimum public float required by the PSE for continuing listing.
Turnover for the day amounted to P6.92 billion. Buying was broader compared with the previous day’s selective positioning, as there were twice as many gainers for every single decliner.