Share prices rebound on better economic outlook

Share prices rose sharply yesterday, adding 2.31 percent to post their best finish in more than nine years on the back of increasing investor confidence in the long-term outlook for the economy, dealers said.

Top telecom Philippine Long Distance Telephone Co. (PLDT) led the way, hitting record highs.

The composite index jumped 63.55 points to 2,818.83, just off the high for the session of 2,819.24. This was the strongest finish since June 27, 1997, when the market closed at 2,835.03.

The all-share index rose 27.02 points to 1,726.25.

Gainers led losers 67 to 30, with 65 stocks unchanged.

Turnover was 2.38 billion shares worth P3.1 billion.

"PLDT is the barometer ... and the strong interest in its shares reflects the overall positive sentiment of investors towards the market and the economy as a whole," said Gomer Tan of Regina Capital Development Corp.

"The peso is strong, supported by remittances (from overseas-based Filipino workers). Oil prices remain below $60 a barrel and the government’s fiscal position is improving," Tan added.

Harry Liu of Summit Securities said that "while technical indicators point to the market’s overbought condition, the long-term outlook for the economy is very bullish."

Top-traded PLDT jumped P125 to P2,545.

JP Morgan said it was keeping its "overweight" rating on PLDT and raised its earning forecasts for this year by 9.8 percent to P193.

Metropolitan Bank and Trust rose P1 to P50.50 and Bank of the Philippine Islands was up 50 centavos to P63.50.

San Miguel A-shares rose 50 centavos to P65.50 but its B-shares were steady at P74.

"Expectations are strong that earnings will be better moving forward,’’ said Fitz Aclan, who helps manage the equivalent of about $2 billion of assets at Banco de Oro. "There is room for improvement in earnings and the momentum is there because of the rate cut and lower inflation.’’

Philex Mining Corp. advanced after the country’s largest gold and copper producer raised its profit forecast by a third. Megaworld Corp., the country’s largest builder of residential and office towers, declined for a second day after announcing it will sell new shares at a discount.

"The last quarter is usually good for business and investors are taking positions in stocks that would take the market higher,’’ said Jovis Vistan, head of research AB Capital Securities Inc. in Manila.

The main Philippine stock index has advanced 35 percent this year, Southeast Asia’s best performer after Indonesia’s Jakarta Composite Index. The Philippine benchmark headed for its fourth straight year of gains. – AFP