Upbeat economic outlook prods traders to buy stocks

Share prices closed 1.05 percent higher yesterday as an upbeat economic outlook encouraged investors to snap up key stocks led by Philippine Long Distance Telephone Co. (PLDT), dealers said.

The composite index added 29.82 points to 2,855.23, after moving between 2,825.16 and 2,856.15.

The broader all-share index was up 12.08 points at 1,767.

Gainers outnumbered losers 71 to 39 with 47 unchanged. Turnover totalled 2.47 billion shares worth P2.85 billion.

"It’s really the economy that is making the market very bullish at this point," said Ron Rodrigo of Unicapital Securities.

Economists are forecasting the Philippine economy likely expanded in the three months to September at the same annual pace as the previous three months at 5.5 percent, thanks to strong exports, farm output and domestic demand spurred by brisk remittances from Filipinos working abroad.

The government will release the third-quarter gross domestic product (GDP) data on Nov. 29.

There are also expectations that the Bangko Sentral ng Pilipinas (BSP) could cut its key interest rates next month, with tamer inflation likely to be sustained and as concerns over spiraling oil prices have eased, analysts said.

"Today’s rally was broad-based and we are seeing a lot of investors going for the smaller-cap issues. These fixed-income investors are obviously looking to place their funds in higher-yielding instruments," Rodrigo said.

"We are looking at piercing the 3,000 resistance level before the end of the year given the market’s optimism and, with the (upcoming) Christmas season, consumer stocks could take the lead," he said.

Top-traded PLDT was up P70 at P2,555 as it tracked gains in its American Depositary Receipts.

Globe Telecom added P20 to P1,270. SM Prime Holdings was steady at P10. Ayala Corp. retreated P2.50 to P497.50. San Miguel A shares fell 50 centavos to P64.50, while its B shares inched up 50 centavos to P73.

"Some analysts and fund managers think the dividends are still going to be a little bigger next year,’’ said James Lago, an analyst at Westlink Global Equities Inc. in Manila.

Bank stocks rebounded from declines yesterday on optimism economic growth will remain intact. Growth may have risen as much as 5.8 percent in the third quarter from a year ago, on rising exports and consumer spending, Economic Planning director Dennis Arroyo said.

"The bullish outlook on the economy will continue to boost stocks,’’ said Mark Canizares, analyst at Manila-based CitisecOnline.com Inc. – AFP