Bullish investors boost Philippine stocks to new high

AFP photo

The local stock index on Monday surged closer to 5,000 as regional sentiment turned bullish over hope for a second bailout package for Greece as well as fresh monetary easing in China.

The main-share Philippine Stock Exchange index closed by 63.13 points, or about 1.3 percent, to close at a new record high of 4,943.84. A new intra-day peak at 4,966.94 was also reached during trading.

“The market’s rally close to the critical 5,000 level can be seen as a vote of confidence by investors on the positive direction of the global economy. Likewise, investors are anticipating improved earnings results from our listed companies in the coming weeks, coupled with rosy expectations of another banner year in 2012,” PSE president Hans Sicat said in a statement.

Joseph Roxas of Eagle Equities Inc. said there was a lot of foreign money looking for investment outlets, and their confidence was spurred by a string of favorable offshore developments.

“The financial system is very liquid. America is also picking up, and China is easing monetary policy, trying to stimulate their economy also,” Roxas said.

The financial and property counter led the day’s upswing, rising by 2.5 percent and 4.4 percent respectively. Trading was likewise buoyant on the mining counter, which increased by 2.7 percent.

Only the services counter ended in the red as investors locked up gains from PLDT and shifted to other blue chips.

Among the key contributors to the PSEi’s rise were Metrobank, Ayala Land, Banco de Oro, Ayala Corp., DMCI, Megaworld, Aboitiz Power, Metro Pacific Investments and Cebu Air.

Value turnover for the day amounted to P10.58 billion. Advancers beat decliners 105-63 while 41 stocks were unchanged.

Frances Cheung of investment bank Credit Agricole CIB described the trade as a “risk-on day, with expectation for a final sign-off of the second bailout package for Greece, and with China cutting the reserve ratio confirming an easing trend.”

The central bank of China announced during the weekend a 50-basis point reduction in the reserve requirement on banks effective February 24.

Since the start of the year, the PSEi has rallied by 571.88 points, or 13 percent, from its end-2011 level of 4,371.96.