Philippine stocks bounce up amid strong corporate earnings reports
MANILA, Philippines—Most local stock prices surged on Wednesday, lifting the main index back to the 4,700 level, as investors snapped up equities, especially those of banks and conglomerates amid favorable Philippine corporate earnings and economic outlook.
The main-share Philippine Stock Exchange index rallied by 33.2 points, or 0.7 percent, to finish at 4,715.64, thus nearing its historical peak.
“It is still liquidity that is driving the market. Notice that the conglomerates are leading. It’s a play on the whole economy,” said fund manager Gus Cosio, president of First Metro Asset Management Inc.
Cosio said the Aquino administration must deliver on its promised infrastructure projects so that the financial markets won’t be disappointed.
All counters traded favorably, but the biggest gainers were the financial and holding-firm counters, which surged by 1.54 percent and 1 percent, respectively. JP Morgan Securities said on Tuesday it had maintained an “overweight” recommendation on the Philippines and that it favored these two counters.
A rebound by geothermal power producer EDC alongside buying of Metrobank and Ayala Corp. contributed most to the PSEi’s rise. EDC shares rose by 1.6 percent to finish at P5.69 per share, rebounding from the previous days’ sell-down triggered by the reported delay in the rehabilitation of its BacMan power plant.
AC shares jumped by 3 percent to close at P362 per share while Metrobank shares were up by 4 percent to P78.90.
Manny Cruz, chief strategist at Asiasec Equities, said AC was catching up with peers like SM Investments Corp. given brighter prospects for telecom unit Globe Telecoms and increasing focus on infrastructure, which was widely cited as a major Philippine investment theme for this year.
Turnover amounted to P7.4 billion.
There were 117 advancers against 52 decliners while 34 stocks were unchanged.
Investors likewise snapped up shares of URC, SM Investments, BDO, ICTSI, Megaworld, ALI, AEV, JFC and DMCI.
Non-PSEi stocks like Petron, NiHao, Manila Mining A (open only to local investors) and Union Bank also surged in heavy volume.
NiHao, which earlier struck deals with foreign groups to boost its mining ventures, soared by 12 percent to P8.99 per share.
Given this favorable momentum, Cruz said that the market may soon re-test its recent all-time highs. He said the next key resistance would be at about 4,765 while the index may establish within this year a new record peak of about 5,270.
The rally is supported by an upbeat outlook on corporate earnings for the fourth quarter of 2011 and for the year ahead alongside expectations of a sovereign credit rating upgrade for the Philippines, Cruz said.
The PSEi last marked an all-time high level at 4,747.90 last January 20, the last trading day before the new lunar year.
