Philippine stocks seen to rise

Local stocks are seen to challenge record highs this week as the overhang from the foreign ownership restriction issue has been lifted.

Last week, the main-share Philippine Stock Exchange index gained 1.33 percent to close at 6,051.75.

The PSEi’s best finish was so far at 6,091.18 recorded on Jan. 9 this year while the intraday peak was at 6,098.14 posted the following day.

BPI Securities said that for this week, the PSEi would be inclined “to breach its new record high as foreign inflows are expected to enter into the picture, boosted by foreign ownership issue relaxation as well as a likelihood of an upgrade in rating this year.”

The SEC indicated last week that it was no longer keen on imposing a 60-40 percent local-foreign ownership restriction on each class of shares as originally intended arising from a controversial Supreme Court ruling on the capital of Philippine Long Distance Telephone Co. Citing an “entry of judgment” received by the SEC from the Supreme Court on Jan. 9, SEC chairperson Teresita Herbosa said it was clarified that the “dispositive” portion of the SEC decision dated June 28 was that the term “capital” as referred to in the Constitution “refers only to shares of stock entitled to vote in the election of directors, and thus in the present case, only to common shares and not to the total outstanding capital stock (common and non-voting preferred shares).”—Doris C. Dumlao