Market touches 5,000-pt level for first time

MANILA, Philippines - The Philippine Stock Exchange index breached the 5,000-point level in mid-morning trade yesterday, buoyed by expectations of a rate cut by the Bangko Sentral ng Pilipinas but eventually succumbed to profit-taking.

The PSEi climbed 40.96 points or 0.83 percent to 4,938.61 after touching a new high of 5,011.09 as investors gobbled up shares of Bank of the Philippine Islands, Metrobank, Alliance Global Group Inc., Universal Robina Corp., and Megaworld.

A total of 5.93 billion shares worth P8.12 billion changed hands yesterday. Gainers outpaced losers 93 to 70 while 45 were unchanged.

All sub-sectors were in the green except the property and mining and oil counters.

The central bank has slashed its interest rates by 25 basis points to a record low of four percent from 4.25 percent.

BPI rose 4.95 percent to finish at P70 while Metrobank gained 3.7 percent to P84 each share.

“While admittedly, local stocks valuation are high, relative to its peers in the region, particularly the ASEAN 6, the levels are still below those reached when the bull rampaged before the global crisis. Furthermore, at roughly 17xPE, it is a couple of points above the historical level of 15-16x. This leaves us to believe that there is still an upside to prices moving forward,” said Jun Calaycay of Accord Capital Equities.

“The successful breach of the 5,000-line, although failing to sustain, may invite erstwhile fence-sitters to take another look at equities, espcially with the earnings round approaching. Over-all stocks are still the best bet relative to returns from, in and by alternative instruments,” Calaycay added.

“The underlying fundamentals are very strong, there is massive liquidity in the financial system, lower inflation and expectation of a rate cut that may happen this afternoon,” said Ismael Cruz, president of brokerage firm IGC Securities.

Earlier, the central bank said it has room to keep monetary policy accommodative, but it would weigh the impact of higher oil prices and Europe’s nagging debt problems on inflation and domestic growth.

Meanwhile,  Asian stock markets edged lower Thursday as buying fervor cooled following a string of strong gains.

After a higher opening, Japan’s Nikkei 225 index faded 0.3 percent to 9,690.03. The benchmark closed at 9,723.24 on Wednesday, its highest level since Aug. 2.

Australia’s S&P/ASX 200 fell 0.7 percent to 4,268.90 after falling metals prices caused materials shares to slump. Benchmarks in India and Indonesia also fell. Markets in South Korea were closed for a public holiday.

Mainland China shares Chinese held on to gains after Chinese manufacturing improved for the third month in a row in a sign of renewed strength in the global economy, but Hong Kong endured a sell-off.

The Hang Seng, which hit a seven-month high Wednesday, fell 0.5 percent to 21,569.71 as property shares faced a pounding after the Shanghai government announced that — contrary to earlier reports — property restrictions would not be eased on purchases of second homes.

“What you are seeing is that the market is overbought, and the market has advanced beyond its fundamentals, so there needs to be a correction, a consolidation, to digest all the gains since last October,” said Francis Lun, managing director of Lyncean Holdings in Hong Kong.

Hong Kong-listed Evergrande Real Estate Group Ltd. plunged 5.7 percent and China Overseas Land & Investment Ltd. tumbled 4.7 percent. China Resources Land Ltd. lost 4.5 percent.

China’s state-affiliated Federation of Logistics and Purchasing said its purchasing managers index, or PMI, rose 0.5 points to 51.0 in February, the third straight month of steady improvement and its strongest reading since June 2011. – With AP