PLDT gains, record high gold prices boost market

Share prices closed firmer after a choppy session yesterday led by gains in Philippine Long Distance Telephone Co. (PLDT) after international credit rating agencies affirmed the company’s foreign currency ratings, with a stable outlook.

The move by Standard & Poor’s, Fitch Ratings and Moody’s Investors Service came after PLDT announced  proposals to amend some of its bond covenants to lift restrictions on the payment of dividends.

Mining stocks also rallied as gold prices soared to fresh 27-year peaks, offsetting worry about surging oil prices to some extent.

The composite index closed 14.63 points or 0.4 percent higher at 3,788.26, after moving between 3,769.17 and 3,802.42.

The broader all-share index inched up 3.64 points or 0.2 percent at 2,345.06.

There were 56 advancers and 41 decliners, while 68 stocks were flat.

A total of 2.6 billion shares valued at P6.2 billion changed hands.

Despite ending the rangebound session in positive territory, the market appeared nervous about high oil prices, said Gomer Tan, vice-president for marketing at Regina Capital Development Corp.

“We expect this consolidation phase to continue for a few more days.

Investors are largely taking a wait-and-see stance as oil prices reached new highs,” he said.

The key index failed again to break above the key resistance of 3,800 points because of such nervousness, Tan said.

The Philippines imports most of its oil requirements.

Oil breached $98 a barrel in Asian trade Wednesday for the first time ever on expectations of another decline in energy reserves in the US, just as it heads into the winter heating season.

The weakening dollar is also fuelling a rally in commodities.

Given the commodities’ record-breaking run, Tan said the Philippine central bank may resist the temptation to cut key interest rates when it holds its policy meeting on Nov. 15.

Local interest rates may be kept steady for the rest of the year despite benign inflation and the Federal Reserve’s further rate cut of 25 basis points last week, he said.

But other analysts remain optimistic that a rate cut is still in store before the year ends.

“Inflationary pressures from fuel prices notwithstanding, we perceive the central bank will be biased to cut interest rates to reduce upward pressure on the Philippine peso,” said Cem Karacadag, analyst at Credit Suisse. — Technistock