Stocks end year with a bang

The stock market ended the year with a bang, climbing to its highest level in nearly 10 years yesterday, due to continued bullishness over the economic prospects for 2007.

"We ended the year with a bang as the fundamentals are looking up," said Astro del Castillo of First Grade Holdings Inc.

The benchmark Philippine Stock Exchange (PSE) composite index surged by 39.16 points to close at the day’s high of 2,982.54. It earlier hit a low of 2,948.55 points.

This was the index’s best finish since April 7, 1997 when it settled at 2,990.96.

The main index ended 2006 up 42.29 points or 42.3 percent over the closing figure for 2005.

Analysts said the upturn this year was supported by the economic rebound, the government’s sharply improved fiscal condition and the resurgence of the peso which finished 2006 at its highest level in nearly six years on steady inflow of remittances from overseas Filipino workers (OFWs) and a lack of corporate demand for the greenback.

At the Philippine Dealing and Exchange Corp. (PDEx), the peso rose by another seven centavos to settle at 49.03 from Thursday’s close of 49.10 to the dollar.

Rosy prospects

Share prices are expected to continue rising next week and into the new year thanks to the country’s improving economic prospects, analysts said.

"The market may try to move toward the 3,000-point resistance next week," said Citiseconline investment analyst Mark Alan Canizares. "The momentum is there right now in the market and there are no negative developments," he added.

The only major concern in 2007 is the Congressional and local elections in May which may cause investors to become more cautious while they await the outcome but even the elections are not expected to lead to a prolonged downturn.

For the week to December 29, the Philippine Stock Exchange composite index rose by 4.35 percent or 124.23 points to 2,982.54 points, a near-10-year high.

Average daily volume slipped to 2.88 billion shares worth 2.28 billion pesos (46.5 million dollars) from 3.68 billion shares worth 3.08 billion pesos in the previous week.

"The uptrend will still persist next week. The market might gain some ground," said Spencer Yap of BPI Securities Inc.

"Profit taking is possible next week but it probably won’t happen," he said adding investors may wait till late-Janaury or early February, to see how corporate figures are performing, before deciding whether to sell.

Yap said "the general uptrend should still continue next year," as the economy is expected to remain rosey.

He forecast a 10 to 20 percent rise in the market in 2007.

"The only possible blip (on the screen) are the elections in May. People might take a breather. There might be some caution just before the elections," Yap said.

"Next year, we are still bullish about the market," said Gomer Tan of Regina Capital Development Corp., citing an expected rise in spending for the May elections and the country’s improved economy.

He said the index could even hit the 3,400-point level in 2007.

Top-traded PNOC Energy Development Corp added five centavos to settle at P4.85.

Among heavyweights, Philippine Long Distance Telephone Co. was up P100 at P2,550 while conglomerate Ayala Corp gained P10 to a record P590.

Property developer Megaworld Corp rose eight centavos to P2.42, also an all-time high.

Food and beverage firm San Miguel Corp’s A-shares advanced P1 to P67.50 and its B-shares gained P2.50 to P77.50. — AP, AFP