Philippine stocks rise sharply amid China gains
MANILA, Philippines—The local stock market rose sharply albeit on thin trade on Monday on prospects of fresh local interest rate cuts and soft economic landing in China.
The main-share Philippine Stock Exchange index gained 83.47 points, or 1.6 percent, to finish at 5,297.99 on a statement from Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. that the monetary authority would have scope to ease monetary policy this year.
Stock markets across the region likewise mostly extended gains after China’s second-quarter economic growth reported last week (7.6 percent) was within expectations.
At the local market, all counters gained except the mining/oil counter, weighed down by the realization that the recently issued mining executive order would gnaw at earnings of mining firms over the short term.
Value turnover amounted to P5.19 billion, lower than the P7.64 billion average daily value turnout in the first half. Ninety-six advancers overwhelmed 58 decliners while 39 stocks were unchanged.
PLDT led the index higher, alongside gains eked out by Metrobank, AGI, SM Prime, Megaworld, BDO, URC, First Gen, Globe, MPI, SMIC and ICTSI.
The day’s outperformer among the 20 most actively traded stocks was Empire East, whose shares surged by 11.25 percent to P0.89 per share on news of a P45-billion residential property venture with the Okada group in Pagcor City.
FPH, GT Capital, Security Bank and Puregold shares also rose in heavy trade.
On the other hand, there was profit-taking on Bloomberry (-2.31 percent) and RLC (-0.55 percent).
A recent report from the Bank of the Philippines Islands said the Philippines can prove that it drives a “sports car” rather than a “jeepney” economy by embarking on further interest rate cuts and a more aggressive government spending given the challenging global environment.
With the negative backdrop of the European debt crisis, a floundering US recovery, the slowing of China and weakness in commodity prices, the BPI research favored a fresh policy interest rate cut to a new record low of 3.75 percent or lower, which was in contrast to the mainstream view that the BSP would likely keep its overnight borrowing rate steady at 4 percent for the rest of the year. The BSP has slashed its key rates by 50 basis points earlier this year.
