PSE index pierces 4,700-level; sets new all time high

MANILA, Philippines - Local stocks rallied for a third straight day to set a fresh record high yesterday, breaking past the 4,700-level on strong investor optimism over the economy’s future growth.

The benchmark Philippine Stock Exchange index (PSEi) ended at 4,700.37, gaining 22.75 points or 0.49 percent with value turnover hitting P5.9 billion, as all sub-sectors rose led by the mining and oil sector.

Over the past three days, total gains posted by the PSEi reached 121.45 points or 2.7 percent.

Gainers outpaced losers, 103 to 51, while 47 issues were unchanged. Copper-gold producer Philex Mining and Ayala-led Globe Telecom led the advancers.

The Bangko Sentral ng Pilipinas slashed yesterday its key interest rates by 25 basis points, the first time since 2009. The rate cut is seen to fuel the country’s economic growth, boosting lending activities of banks and allowing more companies to borrow funds to bankroll expansion.

Likewise, the US markets were in the green as investors cheered the International Monetary Fund’s move to raise $600 billion to lend money to countries affected by the eurozone debt crisis.

“Global markets are showing signs of life, with several economies reporting stronger-than-expected growth numbers. It’s been a very positive start so far, and it would be good to see continued buoyancy in the market this year,” PSE president and chief executive officer Hans B. Sicat said.

“The market appears to be enjoying favorable financial and economic indicators that continue to support the market’s rallies,” he added.

SB Securities research head Erwin Balita said stocks will continue to rise even after yesterday’s central bank decision, whether the bank cuts rates or keeps them steady, because rates are already low and conducive to economic activity.

But he said fewer stocks will gain, as opposed to the broad moves earlier this month.

Accord Capital Equities Inc.’s Jun Calaycay, however, said the market is now in technically overbought territory, which could result to a pullback.