Stocks gain on strong GDP, peso, corporate news

Stocks rose yesterday, drawing strength from favorable second-quarter economic numbers, the peso’s strength and positive corporate developments.

The benchmark 30-company Philippine Stock Exchange Index rose 17.21 points, or 0.7 percent, to 2,329.44.

On Thursday, the government reported that the economy expanded 5.5 percent on-year during the quarter ended June 30, in line with market and government estimates.

The peso also continued to perform well against the dollar, with the peso hitting a new four-year high of 50.70 in morning trading yesterday.

Philippine Long Distance Telephone Co. (PLDT) was the most actively traded stock, rising 0.8 percent to P1,925, in step with the 1.2-percent advance in the company’s American Depositary Receipts in New York Thursday.

News that Equitable PCI has accepted the offer of SM Investments to buy a 10.8-percent stake in the country’s third-largest lender by assets helped boost bank stocks. Bank of the Philippine Islands was up 0.9 percent at P53.50, Security Bank rose five percent to P52.50 and Union Bank gained 1.1 percent to P45.

The deal brings SM Investments closer to its ultimate goal of merging its banking arm, Banco de Oro, with Equitable PCI, where it already has a 34-percent stake on top of the shares it just agreed to buy.

SM Investments and Banco de Oro, however, fell on profit taking. SM Investments was down 0.9 percent at P220 after rising 2.8 percent this week, while Banco de Oro fell 1.4 percent to P36.50 after gaining 7.2 percent during the past four sessions.

Following a two-week suspension, Baguio Gold resumed trading yesterday after the holding concern submitted more information on its plan to acquire control of Philippine Airlines. The trading resumption promptly triggered a price freeze when the stock rose 50 percent to P4.05 on heavy volume of 1.56 million shares.

All sectoral indicators advanced. Gainers led decliners 75 to 25, while 58 stocks were unchanged.

"Investors continued to snap up shares, given the improving economic fundamentals. A strong peso is good news for companies with import requirements and dollar-denominated debt," said Gomer Tan of Regina Capital Development Corp.

The two stocks had rallied after SM Investments announced Tuesday that it was offering to buy all shares in Equitable PCI Bank that it does not already own and that it may merge the bank with another, possibly Banco de Oro. Equitable was unchanged at P79.

Food and beverage giant San Miguel Corp.’s A-shares were steady at P65.50 and its B-shares flat at P71. – AP, AFP