Philippine stocks hit new high
MANILA, Philippines—The local stock index surged to a new record high, breaching 4,855 in early trade on Monday as an upbeat US jobs data added to the market’s strong momentum, but it pared down gains at closing due to intra-day profit-taking.
The Philippine Stock Exchange index rose by 1.2 percent, or 57.76 points, to close at 4,816.33. It went up by nearly 2 percent in morning trade, powered by banks and conglomerates whose respective counters jumped by 3.2 percent and 1.8 percent. These sectors are both seen as a proxy to how the domestic economy will perform.
Banks were boosted by expectations of higher earnings from loan growth this year and were likewise aided by the Bangko Sentral ng Pilipinas’ decision to cut the reserve requirement by 3 percentage points in lieu of a tighter definition of the formula in computing such reserves.
Fund manager Gus Cosio, president of First Metro Asset Management Inc., said that while the market’s view on the reserve requirement move was mixed, the impact would be favorable on banks that have room to expand their balance sheet by growing their loan book. At the same time, he said big-ticket infrastructure projects in the pipeline this year would benefit consumers and thereby benefit banks.
BDO, Security Bank and Metrobank gained in heavy volume. Cosio noted that Security Bank was the best performing bank for the day (up 6.4 percent) as investors anticipated growth in earnings from an expanded distribution network following its acquisition of Premiere Development Bank.
Asked about the PSEi’s softening after hitting new all-time highs in the morning, Cosio noted that with the trading hours extended into the afternoon, day traders have become more active in intra-day plays.
All counters ended in the green except for the mining/oil counter, which slightly declined.
Value turnover was heavy at P8.96 billion. There were 112 advancers that overpowered 59 decliners while 36 stocks were unchanged.
Other stocks that aided the PSEi’s rise were PLDT, AGI, ALI, AC, AEV, Cebu Air, AP and DMCI. Stocks that gained in heavy volume were GMA Holdings, Puregold and Petron.
LMG and Chemphil went on voluntary trading suspension amid ongoing talks to bring in a new investor.
