Share prices on the Philippine Stock Exchange surged to an all-time high in a liquidity-driven rally on Friday, boosted by hopes of a bailout package for debt-ridden Greece and positive economic data from the US.
The main PSEi rose 114.14 points or 2.39 percent to close at 4,880.1, following three successive days of declines.
More than 9.895 billion shares valued at P8.292 billion were traded.
“This is a liquidity-driven rally,” said Mark Angeles, head of research at First Metro Securities Brokerage Corp.
“There are liquidity flows recurring… coming in with the optimism on US jobs data” and the bailout package for Greece, said Angeles. The previous PSEi high was on Feb. 2, 2012 at 4,822.08 points. Year-to-date, the PSEi has gained 11.6 percent. Friday's performance was also the index's highest point growth since October 7, 2011 when it posted a gain of 118.74 points, the PSE said in a statement.
This was also the index's highest percentage growth since October 7, 2011 when it posted a gain of 3.1 percent.
Intraday, the PSEi hit a new high at 4,886.99 points surpassing the previous record intra-day level of 4,855.00 points posted on February 6, 2012.
"Hopes towards a second bailout for Greece as well as positive data on the
US jobs and housing markets have boosted today's trading following tepid
market movement in the past days. Strong corporate and local fundamentals have in turn pushed the market further as the gains we posted today topped the other market rallies in Asia." said PSE president and CEO Hans B. Sicat.
Other Asian markets reacted positively to those developments.
“Asian shares rebounded on Friday on signs euro zone officials will soon approve a long-awaited bailout for Greece, reducing the risk of a debt default, and after jobs and manufacturing data pointed to a healthier US economy," according to a Reuters.
MSCI's broadest index of Asia Pacific shares outside Japan rose as much as 1.4 percent, recovering most of the losses during Asia's trading day on Thursday when worries about a delay in signing a Greek deal sparked fears of a Greek default, the Reuters report noted.
US jobless claims unexpectedly fell last week to a near four-year low, January housing starts came in better than forecast, and the pace of factory activity in the US Mid-Atlantic region gained momentum in February.
The Standard & Poor's 500 Index rose to 1,358.05 on Thursday, a nine-month high, boosted by the US data.
"Sentiment has brightened to encourage risk taking," said Masayuki Doshida, senior market analyst at Rakuten Securities.
"An easy monetary environment continues, with another liquidity injection scheduled later this month from the European Central Bank and expectations a March default by Greece can be avoided spurring 'risk-on' momentum," he said.
Euro zone officials said on Thursday they were putting the finishing touches to a second bailout deal for Greece for approval on Monday, with a focus on how Greece can prioritize debt repayment and ways to ensure Athens commits to reforms.
As global central banks create money, the financial system gets awashed with cash, said First Metro’s Angeles.
“Creating such liquidity drives equities higher and bond yields lower,” Angeles added.
Winners led losers 123 to 56, with 28 issues closing unchanged during Friday’s trading on the PSE. — With Reuters/KG,