Philippine stocks hit record high, breach 5,000 mark for 1st time

The local stock barometer breached the 5,000 mark for the first time in history in intraday trade Thursday, riding on upbeat investor sentiment in a low interest rate regime. The index, however, pared down gains at closing.

The main Philippine Stock Exchange index (PSEi) finished 40.96 points, or 0.84-percent higher, at 4,938.61, pulling back from the day’s peak of 5,011.

Dealers said the 5,000-mark was breached in the morning as investors anticipated a further monetary easing by the Bangko Sentral ng Pilipinas (BSP) while global risk appetite was also boosted by a fresh liquidity release by the European Central Bank.

As expected, the BSP cut after the market closed its main policy rate by 25 basis points to a record low of 4 percent to help cushion the domestic economy from the global slowdown.

Top lender Bank of the Philippine Islands closed nearly 5 percent higher and second-ranked Metropolitan Bank & Trust Co. rose 3.7 percent.

“The market anticipated another rate cut and we’ve seen a lot of buying into banks,” said Ira Ganhin, an analyst with Manila-based BPI Asset Management.

“The level of bad loans has fallen while loan growth is also increasing. So everything seems to be going right for the banking sector,” he said.

All counters performed strongly in morning trade but toward the end of the session, the property, services and mining/oil counters succumbed to profit-taking.

The financial counter outperformed the main index as it gained 2.5 percent while the industrial and holding firm counters firmed up slightly.

“The PSEi breached the 5,000 level but was unable to sustain it. The market is susceptible to near-term consolidation. We, however, view pullbacks as opportunities to increase exposure,” said Mark Angeles, head of research at First Metro Securities. “The financial world is better today than it was last year.”

Trying it on for size

“The market tried the 5,000 level on for size today but did not stay there for long as many participants sold into the rally,” said Manuel Lisbona, deputy chief at PNB Securities.

“I think the market will continue to attempt to push through 5,000. A decisive close above the level will provide stimulus for additional buying,” he added.

Value turnover for the day amounted to P8.1 billion. There were 93 advancers as against 70 decliners while 45 stocks were unchanged.

Retreat in much of Asia

Shares in much of the rest of Asia retreated on concerns about the global economic outlook.

Federal Reserve Chairman Ben Bernanke on Wednesday put the brakes on the recent global rally by curbing optimism about the strength of the US economic recovery, but without signaling any further monetary easing to stimulate growth.

Chinese official and private sector factory data also reminded investors of the fragile state of the global economy, while suggesting Beijing could avoid a hard landing.

Stocks in Singapore erased early gains to end 0.5 percent lower, while Indonesia’s main index fell 0.58 percent after gaining 2.1 percent the previous session.

Malaysia also pulled back from the day’s high to end up 0.2 percent and Thailand’s SET index was up 0.4 percent. Vietnam’s Ho Chi Minh Stock Exchange index rose 1 percent.

The Morgan Stanley Capital International’s (MSCI) broadest index of Asia Pacific shares outside Japan fell 1 percent by 1000 GMT while the MSCI index for Southeast Asia, made up of selected regional stocks, was down 0.6 percent.

The Southeast Asia index had surged more than 13 percent so far in 2012 through Wednesday’s close as hopes for some stabilization in Europe’s debt crisis and encouraging US economic data emboldened investors to move back into riskier assets. With a report from Reuters

Originally posted at 06:07 pm | Thursday, March 01,  2012