Stocks, peso rise on bullish outlook

MANILA, Philippines - Local markets rallied yesterday on the back of   much improved economic fundamentals, rising business optimism and strong global markets.

At yesterday’s trading at the Philippine Stock Exchange (PSE), the main-share index surged by 66.71 points, or two percent, to close at 3,253.48. Yesterday’s gain was the stock market’s strongest daily gain so far this year.

At the same time, the peso broke into the 44 to $1 level to hit a fresh 20-month closing high of 44.930 to a dollar. Yesterday’s close was the currency’s strongest level since it closed at 44.720 to $1 on Aug. 13, 2008.

Trading volume was heavy at $1.027 billion, up from    $796.29 million last Monday. The peso yesterday hit a high of 44.820 and a low of 45 to settle at an average rate of 44.912 to the dollar.

A trader said the Bangko Sentral ng Pilipinas (BSP) intervened yesterday to smoothen the movement of the peso against the dollar.

Currency traders said the plan of the Chinese government to allow the yuan to appreciate against the dollar would augur well for the peso as this would translate to cheaper exports from the Philippines.

One of the traders said China is fast becoming a major market for Philippine-made products after its major markets including the US and Japan were battered by the global financial crisis.

At the PSE, all counters were up but the sectors that benefited the most from the rally were the holding firms and mining/oil counters.  

Ninety-one gainers overwhelmed 31 decliners and 50 unchanged stocks while value surged to P4.22 billion.

The PSE’s list of 20 most actively traded stocks all advanced, led by telecommunications giant Philippine Long Distance Telephone Co., Metropolitan Bank and Trust Co., Ayala Corp., Metro Pacific Investments Corp., First Philippine Holdings Corp., Energy Development Corp., International Container Terminal Services Inc., Alliance Global Group Inc., SM Investments Corp., and Aboitiz Equity Ventures.

PLDT rose 1.8 percent to P2,505 a share tracking the 2.3-percent rise in its ADRS overnight in New York. The Ayala Corp. and Metro Pacific were also actively traded today.

Ayala Corp. closed at a 22-month high as it added three percent to P347.50 a share. Intraday though, the stock was up by as much as 3.7 percent as it touched a high of P350 a share.

Metro Pacific, on the other hand, gained 1.6 percent to P3.30 as CLSA Asia Pacific raised its target price on the stock by 18 percent to P4.28.

Additionally, DMCI Holdings and Semirara also rose to fresh highs yesterday.

SCC surged to its highest level in over a decade, up three percent to P67 share while optimism over both SCC and Maynilad Water pushed DMCI’s stock to an all time high of   P16.50 a share.

DMC settled higher by 4.9 percent to P16 share.

And finally,Asia Trust added three percent to P3.30 a share even after it denied that it’s in talks with potential buyers for a majority stake in the firm.

Meanwhile, in New York oil prices surged Monday on a swathe of positive economic data that pointed to a building US economic recovery from the worst recession in a generation.

Stronger than expected housing and service-sector data followed hot on the heels of improving employment figures published on Friday, pushing up expectations of higher energy demand.

By the close of trade in New York a barrel of light sweet crude for May delivery fetched 86.62, up $1.75 from the open.

In London, Brent North Sea crude for May climbed 1.87 cents to $85.88 a barrel.

“Very simply put, after a holiday weekend, people are looking at the employment from Friday and are feeling very bullish for this market,” said Jason Schenker of Prestige Economics.