Stocks hit 19-mo high; peso gains

The stock market surged to a 19-month peak yesterday due to strong foreign demand for select blue chips led by dominant telecom player Philippine Long Distance Telephone Co. (PLDT) after reports that it posted solid profit results.

The 30-company Philippine Stock Exchange Index ended up 20.68 points, or 1.5 percent, at 1,432.27, its highest close since April 5, 2002, when it finished at 1,432.86.

The index rose 0.9 percent Monday and is up 5.5 percent since Oct. 28.

At the Philippine Dealing System (PDS), the peso gained 12 centavos to close at 55.360 from Monday’s close of 55.480 to the dollar. Total volume traded amounted to $111.50 million on an average rate of 55.481 to $1.

The peso weakened to as low as 55.60 to $1 but both traders and monetary officials attributed this extraordinary weakness to the weakending of regional currencies, particulary the Japanese yen.

"The yen was weak in the morning, but it recovered later in the day. The peso did the same. We also saw dollar selling by exporters and OFWs," Bangko Sentral ng Pilipinas (BSP) Deputy Governor Amando Tetangco Jr said.

Tetangco said it was not necessary for the BSP to intervene because the depreciation of the peso was not sustained and it recovered almost immediately after hitting yesterday’s 55.60 bottom.

PLDT Leads Gainers

Telecom giant PLDT was the most actively traded stock yesterday, up P45, or 5.8 percent, at P825, after the dominant carrier posted a 58 percent on year rise in net profit, fueled by its successful mobile phone operations.

PLDT’s American Depositary Receipts rose 4.7 percent Monday in New York.

"I think PLDT’s earnings report was mainly responsible for lifting sentiment in the market," Citiseconline.com investment analyst Mark Alan Canizares told Dow Jones Newswires.

Canizares said PLDT’s performance should also augur well for the country’s overall economic performance.

"It’s a good indicator of how the consumer sector is performing for the Philippines," he added, citing strong demand for cellular phone services.

Wall Street’s advance Monday and the favorable performance of Asian stock markets so far Tuesday also provided an additional boost to select Philippine shares, said Canizares.

The broader market, however, was mixed, with decliners outpacing gainers 28 to 23, while 48 issues were unchanged.

Other active stocks included PLDT’s mobile phone rival Globe Telecom, up P30, or 3.7 percent, at P840, on expectations it will report strong January-September earnings on Nov. 11.

San Miguel B rose P1, or 1.6 percent, at P63, on bargain hunting.

Capping the market’s rise was profit-taking in Manila Electric B, down 0.50 peso, or 2.5 percent, at P19.75.

Losers still outpaced advancers 28 to 23. Turnover reached P697.13 million lower than Friday’s P821.38 million.

"It looks like the buying is limited to companies which have reported or are expected to report good third-quarter earnings," said Jose Vistan, an analyst at AB Capital Securities Inc.

"But the mood is quite positive. It is being dictated by bullish rallies in overseas markets like in the , Japan and the region."

The stock market also shrugged off renewed weakness in the peso which hit a three-month low of 55.60 in morning trade on Tuesday, mainly on concerns the government may exceed its deficit target this year.

The all-shares index was up 15.37 points at 862.60. The commercial-industrial index was up 38.22 at 2,111.84 while the property was down 0.62 at 625.68.

Mining was down 55.56 at 1,671.13 and oil down 0.03 at 1.36 but the banking and financial services sector rose 5.16 to 448.71. – AFP, Reuters