Index surges 55 pts as investors gobble select stocks

Share prices rose sharply yesterday, closing 2.92 percent higher as investors aggressively bought into companies expected to post strong first half results against a backdrop of easing political concerns, dealers said.

A calmer political environment following weeks of opposition efforts to topple President Arroyo helped sentiment and allowed the market to snap back after recent losses.

The Philippine Stock Exchange composite index rose 55.16 points to 1,944.71 after trading between 1,889.55 and 1,947.12. Volume was 297.36 million shares worth P1.2 billion

The broader all-shares index rose 22.91 points to 1,175.02.

Gainers beat losers 57 to 16, with 35 stocks unchanged.

"There are a lot of reasons to accumulate (stocks) again. For one, the political tension has somewhat eased. Investors are also looking forward to strong results... despite the impact of higher oil prices and a weaker peso," said Lawrence de Leon of Accord Capital Equities Inc.

Investors appear to have welcomed President Arroyo’s announcement on Tuesday that she will form a commission to probe poll-cheating charges as a sign that the government is intent on resolving the issue.

Mrs. Arroyo has been under pressure to step down after the opposition released audiotapes which they allege prove that she cheated to win the 2004 elections.

"Apparently, the impression in the market is that the government is trying to be transparent about the issue. For investors, this seems to be an acceptable way of alleviating the current political tension," said Jose Vistan of AB Capital Securities.

Vistan said the gains were a combination of easing political concerns and technical buying after the market broke major resistance at 1,900 points.

"The market is still oversold. What we are going through right now is another episode of bargain-hunting, partly inspired by the declining tensions on the political front," said Gomer Tan of Regina Capital Development Corp.

Philippine Long Distance Telephone Co. was the most active stock, ending up P30 to P1,560.

Bank of the Philippine Islands was second top-traded, rising P1 to P50.

Ayala Corp. advanced P20 to P315 while its real estate unit, Ayala Land Inc. gained 20 centavos to P7.90.

San Miguel Corp. A shares, limited to local investors, were up P1 at P62 while San Miguel Corp. B shares, available to both locals and foreign investors, jumped P7 to P101.

President Gloria Macapagal Arroyo’s decision to form a truth commission on allegations that she cheated in last year’s presidential elections did much to placate jittery investors, said AB Capital Securities Research Director Jose Vistan. – AFP, AP