Market climbs 8 pts with bank shares leading gains

Share prices closed up 0.39 percent yesterday, hitting their highest level in six weeks as investors bought bank stocks amid an improved outlook for the sector, dealers said.

However, the financial sector was the only one to see significant interest, with trading light elsewhere in the market.

The composite index added 8.40 points to 2,150.17 after trading between 2,141.77 and 2,157.00.

This is the best closing level since Feb. 2 when the composite index finished at 2,159.37.

The broader all-shares index was down 2.09 points to 1,037.98.

Gainers outnumbered losers 52 to 30, while 54 stocks were unchanged.

Volume reached 629.36 million shares worth P636.6 million.

2TradeAsia.com said there was follow-through buying in bank and property-related stocks after the legislature this week extended a law that allows banks to sell non-performing assets free from some taxes and at substantial discounts.

The move is expected to lead to lower interest rates as banks remove idle assets from their books which have been a major drag on their profitability in recent years.

Meanwhile, the extension of the law should also give the real estate market a boost as homes and office space become more affordable, it said.

Alfred Dy, head of research at CLSA Philippines Inc., forecasts bad loans and seized assets in the commercial banking industry will fall to P280 billion this year, compared with P359 billion in 2005. He expects non- performing assets to drop to P205 billion in 2007.

First Philippine Holdings Corp., the nation’s third-largest power producer, added P1.50, or 3.7 percent, to P42.50, rounding off a 4.9-percent weekly gain, its third- largest weekly climb this year. The company said yesterday that its creditors will allow it an additional $50 million in April, boosting its funds for expansion and to pay debt.

ISM Communications Corp. (ISM PM), gained 0.5 centavos, or 10 percent, to 5.5, its biggest gain since a 14 percent climb on Jan. 20. Company president Eric Recto said ISM wants to buy more shares in Eastern Telecommunications Philippines Inc., after increasing yesterday increased its stake to 57.7 percent.

Bank of the Philippine Islands led gainers by adding a peso to P62.

Its rival Metropolitan Bank and Trust also advanced by a peso to P37.50. Equitable PCI Bank gained P1.50 to P74.50.

Philippine Long Distance Telephone Co. retreated P5 to P1,825, while rival Globe Telecom gained P10 to P875.

San Miguel A, restricted to local investors, fell 50 centavos to P60.50. San Miguel B, available to foreign investors, ended steady at P78. – AFP