Index advances 30 pts on foreign fund buying

Share prices rose yesterday on foreign fund purchases as investors refocused on the country’s positive fundamentals after the mid-week anxiety over North Korea’s missile tests.

"The missile test was just a blip. It is still a geopolitical concern that will be watched by markets carefully, but I think the fundamentals of the region are now carrying more weight in investors’ minds," said Fitzgerald Aclan, assistant vice president for the trust banking services of Banco de Oro.

The benchmark 30-company Philippine Stock Exchange Index rose 30.18 points, or 1.4 percent, to 2,258.03 after shedding 1.5 percent Thursday.

All sectoral indicators advanced. Gainers led decliners 51 to 25, while 47 stocks were unchanged.

Philippine Long Distance Telephone Co. (PLDT), the most actively traded stock, advanced 1.3 percent to P1,960. Ayala Corp. jumped 4.6 percent to P402.50.

Stocks belonging to the Lopez group also climbed. Manila Electric B gained 3.3 percent to P23.25, First Philippine Holdings added 3.4 percent to P45.50, Benpres Holdings rose 3.8 percent to P1.10, and ABS-CBN Philippine Depository Receipts increased 1.5 percent to P17.

The threat of another increase in US interest rates during the Federal Reserve policy meeting next month continues to cast a shadow on the market.

"The situation is volatile right now," said Aclan, noting that the Fed statement last week didn’t provide a clear indication as to what bias US monetary authorities will adopt moving forward.

The Institute for Supply Management’s index of non-manufacturing businesses including banks, builders and retailers dropped to 57 in June from 60.1 in May. Readings above 50 indicate expansion in industries that account for most of the US economy.

"The report shows a slowing US economy, supporting expectations the Fed’s last rate increase will be in August,’’ Jenny Ting, who helps manage about $4.7 billion at Bank of the Philippine Islands in Manila, said.

After raising a key interest rate for the 17th time, the Fed said last week that "US economic growth is moderating" and "inflation expectations remain contained," boosting optimism the cycle of rising borrowing costs may be ending.

"Since US interest rates became a pressing concern, our market has become positively correlated with overseas markets, especially the US,’’ Ting said. He forecast the main stock index to climb to between 2,400 to 2,500 this year.

Bank of the Philippine Islands, the largest lender by market value, gained 50 centavos, or one percent, to 51, rounding a two-percent gain. International Container Terminal Services Inc., the largest port operator in the country, rose 1 peso, or 7.4 percent, to P14.50, climbing the most since May 5. – AP