MANILA, Philippines - The local stock market hit a new record high yesterday, mirroring global equity gains and positive investor sentiment on the country’s economy.
The Philippine Stock Exchange index (PSEi) reached a new record high of 4,591 in early trading yesterday but surrendered some gains to close at 4,561.08, up 19.48 points or 0.42 percent as both foreign and local investors gobbled up Ayala Land, Aboitiz Power and International Container Terminal Services Inc.
More than three billion shares valued at P6.26 billion changed hands. Gainers outnumbered losers, 100 to 57 while 42 were unchanged.
The mining and oil index declined after Lepanto A & B succumbed to profit-taking, shedding 0.72 and two percent, respectively.
Year-to-date, the PSEi has gained 4.33 percent or 189.12 points.
Total market capitalization stood at P8.82 trillion, up 1.41 percent from P8.70 trillion at end-2011.
“We continue to enjoy the bullish trend started last year when the PSEi was cited one of the best performing indices globally,” PSE president and chief executive officer Hans B. Sicat said. “We are seeing healthy trading activity behind the rise of the index and we hope the macro environment will continue to boost sentiment in the market.”
Wealth Securities attributed the market’s strong growth to the country’s rosy economic prospects.
First Metro Investment Corp. expects the country’s economy to grow faster this year at five to six percent on the back of the expected increase in government spending, robust dollar remittances from overseas Filipino workers and higher consumption spending.
OFW remittances will continue to be resilient with a five-to seven-percent improvement despite the crises in the US and euro zone.
According to FMIC, the peso-dollar rate is expected to hover at 43-45 to $1 range as the US is seen to continue to outperform the euro zone and Japan, bolstering its status as a safe haven.
FMIC also sees in increase in exports following a slightly negative performance in 2011.
For his part, Charles Ang, research analyst at Citiseconline.com Inc. said it was a mix of foreign and domestic funds coming into the market, driven by the perception of improving economic conditions.
The main drivers are expectations of infrastructure development that will pump prime the economy and advent of a low interest rate regime that will contribute to economic growth, Ang said.
Meanwhile, world stocks rose Tuesday, assisted by an absence of bad financial news and signs that the US economy may be strengthening.
Stock markets were higher in early European trading, tracking gains in Asia. Britain’s FTSE 100 rose 0.9 percent to 5,662.63. Germany’s DAX jumped 1.4 percent to 6,100.30 and France’s CAC-40 rose 1.6 percent at 3,177.48.
Ahead of the opening bell, Wall Street appeared set for a higher opening. Dow Jones industrial futures rose 0.5 percent to 12,402 and S&P 500 futures gained 0.6 percent to 1,283.10.
Japan’s Nikkei 225 index, reopening after a three-day holiday weekend, added 0.4 percent to close at 8,422.26. Hong Kong’s Hang Seng index rose 0.7 percent to 19,004.28 while South Korea’s Kospi jumped 1.5 percent to 1,853.22. Australia’s S&P ASX 200 rose 1.1 percent at 4,152.20. Benchmarks in Singapore, Taiwan, and Indonesia also posted gains.
Improving economic data out of the US was one key factor working in favor of markets, said Cameron Peacock of IG Markets in Melbourne. The US added 200,000 jobs in December in a burst of hiring that drove the unemployment rate down two notches to 8.5 percent, its lowest in almost three years. That led economists to conclude that the improvement in the job market might just last.
“With all the problems of the last few years, and the emergence of China as a legitimate economic superpower, it should not be forgotten that the US is still the world’s largest and most influential economy,” Peacock said in a report. – With AP - By Zinnia B. Dela Peña