Record gold prices, hopes of rate cut boost index

Share prices closed 0.70 percent higher yesterday as record gold prices and hopes of lower borrowing costs sent the stock market index to its best finish in nearly nine weeks, dealers said.

They said all sectors advanced, but miners outshone everything else on strong demand after gold prices hit fresh 28-year highs last Friday.

The composite index added 25.02 points to 3,597.92, off a high of 3,606.72. A total of 3.2 billion shares worth P4.03 billion were traded. Gainers overwhelmed decliners 84 to 23, 53 stocks were steady.

It was the main index’s highest close since July 26, when it settled at 3,659.68. The broader all-share index rose 17.46 points to 2,244.17.

Major property developers were also in favor on hopes of a cut in key local interest rates when the central bank holds its policy-setting meeting Thursday and on the bullish outlook for the sector.

“Investors have seen buying opportunities in mining stocks because of rising commodity prices,” said Jonathan Ravelas of Banco de Oro.

“But they are likely to continue a wait-and-see stance, especially since the third-quarter earnings reporting season is around the corner,” he added.

“I don’t expect investors to move decisively until after the October 4 meeting of the central bank,” Ravelas said.

But Gomer Tan of Regina Capital Development Corp. said with or without a rate cut, property stocks are unlikely to lose their appeal given their attractive valuations relative to the sector’s profit potential.

He cited in particular the steady flow of remittances from overseas-based Filipinos, amounting to at least a billion dollars every month, which are used to buy new homes.

“While there is some buying interest today, clearly there’s resistance at the 3,600-point level and volumes are thin,” said Harry Liu of Summit Securities.

Philex Mining, the country’s biggest and most profitable miner, rose 30 centavos to P8.

Petron was up 20 centavos to P5.90. Megaworld surged 40 centavos to P3.85, while rival Ayala Land added 25 centavos to P16.50.

Philippine Long Distance Telephone Co. (PLDT) retreated P5 to P2,905 after setting all-time highs last week. San Miguel A was steady at P62 while San Miguel B added P1.50 to P64.             — AFP