Stocks hit 10-yr high

The stock market surged to its highest level in nearly 10 years yesterday, with the benchmark index vaulting past the 3,000-point level on upbeat economic prospects.

Dealers said the government’s improving fiscal position, higher remittances from Filipinos working abroad which has spurred consumer spending, and hopes of easing interest rates and inflation due to stable oil prices, are encouraging more investors to buy stocks.

"Our market is off to a good start in 2007, and the strong finish of the PSEi today has buoyed our expectations that the New Year will usher in more growth for the local stock market," said PSE president and chief executive officer Francis Lim.

The composite index surged 43.85 points to 3,020.70, its highest level in nearly 10 years, after moving between 2,976.85 and 3,028.41. It was the index’s best finish since April 4,1997, when it closed at 3,060.59.

The broader all-share index was up 20.89 points to 1,877.50. Gainers outnumbered losers 76 to 35, while 49 stocks were unchanged. Volume was 4.59 billion shares worth P2.32 billion.

Lim said the market’s performance reflects the continued confidence of investors on the country’s favorable economic prospects, which are perceived to have significantly improved as an offshoot of welcome reforms in the government.

Lim has vowed to pursue more reforms aimed at further attracting more investors into the market and boosting market liquidty.

For his part, Mark Alan Canizares of Citiseconline.com said "the market is geeting a boost from positive economic prospects locally and from the broader optimism of emerging markets in the region."

Canizares said consumer-related stocks are starting to pick up since they stand to benefit from increased spending ahead of the May elections.

"Investors have factored in the coming elections, that’s why consumer stocks are getting a boost."

"It’s another bullish year for the equities market. The sound fundamentals are perfect for a bull market to be sustained, at least in the near term," said Jose Vistan

ATR Kim Eng Securities Inc. expects the market to hit the 3,600 level this year on rosy economic prospects aided by robust dollar remittances from overseas Filipino workers, stable borrowing rates, a strong peso, and an improving fiscal condition.

"Our target for the market is 3,600 this year. The growth will be driven by the same catalysts that fueled the market last year, said ATR Kim Eng Securities chair and president Lorenzo T. Roxas.

Roxas made this projection as he expressed confidence that ATR Kim Eng Securities would maintain its dominant position among domestic brokerage houses in terms of value turnover.

Overall, Kim Eng Securities ranks fifth or sixth among the 180 active member brokers of the Philippine Stock Exchange.

Luz Lorenzo, regional economist at Kim Eng Research PTe. Ltd., is hopeful that the increases in tax revenues last year coupled with the reduction in national debt ratios would finally translate to increases in public spending particularly on infrastructure, education and health services.

"We have seen the peso strengthen and the GDP grow faster. The challenge now is to keep up the performance. There’s a good chance that the economy can do just that, accompanied by reforms," Lorenzo said.

Lorenzo sees GDP, which measures the total market value of all final goods and services produced in a given period of time, hitting 6 percent this year.

With a humming economy, the capital market is expected to grow further which should translate to a better business environment, said ATR Kim Eng Financial Corp. director and executive vice-president Renato Leveriza Jr.

Under a more condudive business landscape, ATR-KE will continue to beef up its presence in corporate finance with increased advisory and underwriting activities especially with its long list of prospective initial public offerings on its plate.