PSE one of Asia's best performers in January-September

MANILA, Philippines - The Philippine Stock Exchange index was one of the best performing indices in the Asian region in the first nine months of the year, growing 34.3 percent to close at 4,047.39 on the back of strong economic fundamentals.

Quarter-on quarter, the PSEi surged 22 percent to cap a phenomenal period at 4,100.07. It also touched new records after reaching 4,123.95 last Sept. 28.

In the nine-month period, market capitalization of all listed companies rose 25.4 percent to P7.4 trillion from P5.9 trillion a year earlier, the PSE said over the weekend.

Based on initial estimates, the average daily value turnover in January-September period jumped 31.4 percent to P4.6 billion from P3.5 billion a year ago.

Preliminary figures also showed that foreigners were net buyers at P11.4 billion during the period under review.

“The unprecedented market performance has reflected the robust fundamentals of the Philippine economy. In particular, benchmark interest rates, which were maintained at a low of four percent for overnight borrowing and six percent for overnight lending since July 2009, have enhanced liquidity in the capital markets,” PSE president and chief executive officer Val Antonio B. Suarez said.

From a gross domestic product (GDP) growth that slowed to 1.1 percent in 2009, GDP accelerated by 7.9 percent during the first semester of 2010. The 91-day benchmark and inflation rates have also remained benign. The latest three-month T-bill and headline inflation rates both averaged at about 4.0 percent in September.

In terms of sectoral indices, the holding firms index emerged as the best performer during the nine-month period, expanding by 93.1 percent. This was followed by the property index which surged by 45.3 percent.  Not to be outdone were companies in the industrial, financials, mining and oil, and service sectors as their indices posted impressive growth rates of 40.1 percent, 40 percent, 14.8 percent and 7.2 percent, respectively.

Companies raised a total of P 59.1 billion from the equities market during the period period under review, up 690.3 percent from the year earlier level.  Among these firms were Bank of the Philippine Islands, First Gen, Interport Resources, PetroEnergy Resources, Petron, and Semirara Mining.

Two firms – Integrated Micro Electronics, Inc. and IP e-Game Ventures, Inc. – listed by way of introduction this year.

“We are encouraged by the performance of the stock market as this paves the way for new public offerings and listings. It also reinforces the direction we have taken to steer the Exchange towards new levels of progress,” Suarez said.

The PSE is now banking on recently approved Real Estate Investment Trust Act to spur the growth of the stock market and the country’s economy.  REITs are companies that own and operate income-generating real estate assets that will be listed on the exchange.

Last July 26, the PSE launched its New Trading System (NTS) to replace the legacy MakTrade system used since the 1990s.  The new innovative trading infrastructure will enhance PSE’s product range, trading performance and volume capacity. Investors trading on PSE markets will have direct access in the future to a wider range of cash, debt, and derivative instruments from one single platform that was not available previously.

The PSE has also integrated its offices in Makati to improve the efficiency of the Exchange’s operations and reduce its occupancy and operational costs.

As part of efforts to promote good governance, the PSE is settting up “Maharlika Board” to further motivate companies to undertake higher standards of corporate governance.

The exchange has likewise approved the spin-off of market regulation into an independent and self-regulatory company to monitor activities of trading participants.