Index continues to surge as investors gobble up blue chips

Share prices closed 0.75 percent higher yesterday, with fund managers buying up blue chips and window dressing their portfolios as the year draws to a close, dealers said.

The composite index rose 21.54 points to 2,877.83, its highest level in nearly nine and a half years, after moving between 2,857.29 and 2,885.67.

It was the index’s best finish since June 19, 1997 when it settled at 2,905.97.

The broader all-share index rose 15.69 points to 1,795.56.

There were 77 gainers and 34 losers with 55 unchanged. A total of 5.12 billion shares worth P3.75 billion changed hands.

Dealers said sentiment was also lifted by Wall Street’s extended advance on Friday and President Arroyo’s move to abandon her divisive plan to amend the constitution. Her move has helped ease political tensions.

"This could be part of the Santa Clause rally that the market usually goes through before the year ends," said Astro del Castillo of First Grade Holdings.

"We also continued to benefit from the additional liquidity brought in by the listing last week of PNOC-EDC. It helped generate interest in a number of stocks," Del Castillo said.

Top-traded PNOC Energy Development Corp. added 25 centavos to P4.55.

Ayala Land advanced 25 centavos to P15.25.

Profit-taking hit Philippine Long Distance Telephone Co. (PLDT) which fell P5 to P2,435.

San Miguel A shares were unchanged at P66 but its B shares rose by P1 to P72.

"The market is really strong. You see a lot of investments coming in, and this may be a result of positive economic growth and low interest rates," said BPI Securities assistant vice president Spencer Yap.

The Bangko Sentral held its overnight rate at 7.5 percent for deposits of up to P5 billion and kept lower payments for higher amounts to spur banks into lending more to private companies.

The central bank won’t lift the tiered interest rate structure until it sees that lending growth is "more or less sustained," BSP Governor Amando M. Tetangco Jr. said.

The bad loans ratio rose to 18.8 in 2001, the highest rate since 1997. The ratio was at 6.7 percent in February 1998.

Other gainers were consumer-related stocks such as SM Prime, up 4.6 percent at P10.25, and San Miguel B shares, available to local and foreign investors, which gained 1.4 percent at P72 on hopes of strong Christmas consumer spending. – AFP