PSE performance reflects economic reforms - P-Noy

CALAPAN CITY, Oriental Mindoro ,Philippines  – The 5,000 breach in the Philippine Stock Exchange – one of the country’s all-time high – is proof that economic reforms he initiated are now actually bearing fruit, President Aquino said here yesterday.

“I don‘t play in the stock market but the stock market is the clearest indicator, and fastest reacting indicator that will show you business confidence,” he told reporters here, describing the rise in the PSE index as “unexplained territory.”

News of such, according to him, also shows that the Philippines’ economic growth is on an uptrend, where economic indicators plot or graph would result in an ascending manner, and not a straight line or where growth will be stagnant.

“What is important is the continuous rise (of the PSE) since I took over, the index was already past 4,000 which we thought would no longer be exceeded,” Aquino stressed.

Were it not for the Middle East tensions, the recession in the US and Europe and the tsunami-earthquake that hit Japan, the 5,000 mark would have been breached early on in his administration, or sometime in 2011.

In truth, last year the PSE had already vowed to reach 5,000 but the crisis in the Middle East happened as well as in Europe. Of course we are happy we reached the 5,000 level and it stays that way,” the President added.

He also took the opportunity to show some bragging rights, as indicated in foreign media articles about his administration. “There are many articles from foreign sources who acknowledge that we are really taking off now.”

“One article attributes to me that ‘I may have the antidote, or the cure, for the sick man of Asia,” a visibly elated Aquino said proudly.

In mid-February, the Philippine Stock Exchange index (PSEi) added 1.29 percent or 63.13 points to close at 4,943.84, a new record finish, while the broader all-share index edged up 0.98 percent or 32.09 points to 3,316.40.

“The market’s rally close to the critical 5,000 level can be seen as a vote of confidence by investors on the positive direction of the global economy,” Hans Sicat, PSE president and chief executive officer, said.

“Likewise, investors are anticipating improved earnings results from our listed companies in the coming weeks, coupled with rosy expectations of another banner year in 2012.”

Brokerage AB Capital Securities, Inc. said in a market report that “Philippine stocks rallied to a fresh all-time high as sentiments for global stocks turned bullish on positive economic outlook. Main driving force for the day was the central bank of China’s cut of reserve requirements for banks.”

Hopes that debt-ridden Greece may clinch a second bailout package during a meeting of euro zone finance ministers in Brussels as well as prospects for better corporate earnings ahead also lifted investor sentiment.

“The market was boosted beyond the 4,900 line as expectations for the Feb. 20 second bailout approval for Greece supported local barometers, as well as anticipation for better-than-expected corporate earnings growth this week which might continue to aid select stocks such as financials, property and holdings,” Freya Natividad, analyst of online brokerage 2TradeAsia.com, said.

The main index last peaked on Feb. 17, climbing 2.39 percent or 114.14 points to close at 4,880.71 as investors cheered improving economic indicators in the US, as well as renewed hopes for a Greek bailout deal.

Domestic share turnover totaled P10.58 billion versus P8.29 billion.

Advancers outnumbered decliners 105 to 63, while 41 stocks were unchanged.

Most sectoral indices ended higher, led by property that surged 4.40 percent or 79.90 points to 1,896.52; mining and oil, 2.69 percent or 677.18 points to 25,836.87; financials, 2.54 percent or 29.48 points to 1,191.05; holding firms, 0.98 percent or 38.24 points to 3,925.41; and industrial, 0.18 percent or 12.93 points to 7,262.42.

Services, however, lost 0.90 percent or 16.32 points to 1,789.17.

Property and banking stocks led market gains yesterday, Elizabeth S. Abadillo, analyst of brokerage Angping & Associates Securities, Inc., said.

Among others, BDO Unibank, Inc. surged 5.36 percent or P3.45 to P67.75 each, Metropolitan Bank & Trust Co. gained 3.53 percent or P2.90 to close at P85 apiece, while Ayala Land, Inc. rose 4.88 percent or P1 to P21.50.