Index gains on strong blue chip buying

Share prices rose slightly yesterday as investors focused on blue chips with positive story lines.

The 30-company Philippine Stock Exchange Index rose 4.38 points, or 0.2 percent, to 2,243.22, after falling 0.8 percent Monday.

"We are beginning to enter a consolidation period," said DA Market Securities president Nestor Aguila, referring to the so-called "ghost month" when investors take a break from the market. The period usually begins in late July and runs through August.

"The leads are basically corporate earnings. Interest will be narrowed down to companies that will have sustainable 15 percent to 28 percent earnings growth," he added.

Philippine Long Distance Telephone Co. (PLDT) gained one percent to P1,965, in step with the 2.7-percent rise Monday in the company’s American Depositary Receipts in New York.

The country’s largest telecommunications group announced during trading that its unit has completed the purchase of SPI Technologies, a business process outsourcing company with operations in 19 locations in North America, Europe and Asia. It provides services for financial, health care, legal and publishing businesses.

Analysts view the acquisition positively, as the business process outsourcing sector is the fastest-growing industry in the Philippines.

Also advancing were Ayala Land, up 2.1 percent at P12; Universal Robina, higher by 5.4 percent at P19.50; and Manila Electric B, which rose 1.1 percent to P24. The stocks may have advanced on talk of good second-quarter corporate results, analysts said.

However, decliners led gainers 44 to 27, while 42 stocks were unchanged. Among stocks that suffered losses were Ayala Corp., off 0.6 percent at P400, and Manila Water, down 1.3 percent at P7.80 on profit-taking.

"There’s very little reason to move the market either way," said Lawrence de Leon of Accord Capital Equities.

"Investors are now taking a breather after weeks of volatility, taking stock of events."

Dealers said the market would likely continue sluggish this month ahead of the release of quarterly corporate results and government fiscal data, with investors opting for short-term trade amid continuing concerns over regional security, high oil prices and the outlook for US interest rates. Top-traded Ayala Land rose 25 centavos at P12 while parent Ayala Corp. succumbed to profit-taking, giving up P2.50 to settle at P400.

Dealers said rotational buying pushed up shares of laggards, including domestic demand-driven stocks which had have missed out on the recent rally. – AP, AFP