MANILA, Philippines - Local stocks rallied to close above the 5,300 level for the first time in two months, extending a rally in regional markets and the US sparked by Europe’s moves to ease its debt crisis.
The Philippine Stock Exchange index (PSEi) surged 53.83 points or 1.03 percent to settle at 5,300.24 yesterday or near the market’s all-time high of 5,330.
Market breadth was positive with gainers outpacing losers 108 to 65 while 39 issues were unchanged. A total of 2.59 billion shares valued at P6.58 billion were recorded changing hands.
At the foreign exchange market, the peso also reacted positively to the outcome of the European Union summit, enabling the peso to touch the 41 to $1 mark yesterday before retreating a little bit and closed 10 centavos higher from Friday.
The local unit closed at 42.020 to the dollar against its 42.120 close last June 29, according to the Philippine Dealing & Exchange Corp. The peso soared as high as 41.950 to $1 during the day.
First Metro Securities said investors’ optimism was high following the euro zone leaders’ decision to ease borrowing costs for Italy and Spain and inject 120 billion euros of stimulus money into suffering euro banks. Adding to upbeat sentiment was the latest euro zone manufacturing data which showed an increase from the previous report.
“Initially, there was positive reaction to the outcome of the European Union summit,” BDO Unibank, Inc. chief market strategist Jonathan Ravelas said in a phone interview.
The rally may however be short-lived, Ravelas said, as “there was really no concrete solution” attained during the two-day weekend summit.
The peso may trade within 41.95-42.20 within the week as the dollar becomes “oversold” and as “corporate demand” kicks in, he added.
Dollars traded yesterday totaled $883.65 million, lower than Friday’s $1.153 billion.
At the Philippine Stock Exchange (PSE), foreign investors gobbled up shares of Metrobank, PLDT, EDC, GT Capital, Philippine National Bank and Megaworld.
Ayala Land gained 2.08 percent to close at P22.05 as investors cheered the company’s partnership with the Ortigas Group to develop the Ortigas family’s vast landbank.
Diversifying conglomerate San Miguel Corp. also rose to P114.60 per share after its president Ramon S. Ang and major shareholder Top Frontier Investment Holdings acquired Eduardo Cojuanco Jr.’s 493.37 million shares at P75 apiece.
“Past the half-way mark of the year, the market continues to show strength, despite heavy headwinds from external sources. This is a confidence vote on the domestic economic prospects which has remained rosy,” said Accord Capital Equities Inc.’s Jun Calaycay.
“A recent review of macro-targets resulted in keeping the original numbers despite the strong indicators posted in the first quarter – and the anticipated strong results for the second quarter. This is seen to provide more fodder to optimism that will reflect in a sustained uptrend in general equity prices,” Calaycay added. –with Prinz Magtulis