Stocks hit new record; peso at strongest in 4 yrs

MANILA, Philippines - Local stocks vaulted to a new record high yesterday as regional sentiment turned bullish on expectations that central banks in Europe and the US will implement measures to boost their ailing economies.

The Philippine Stock Exchange index (PSEi) soared 65.46 points or 1.23 percent to settle at its 20th record close for the year at 5,365.70. The previous record high was set last May 3 at 5,300.41.

“Expectations that US and European central banks will move to stimulate their economies bode well for global markets going forward. We continue to be optimistic that similar developments in the future should help sustain our momentum as we start the second half of 2012 on a high note with the latest PSEi record,” PSE president and chief executive officer Hans B. Sicat said.

The main benchmark index has grown by 22.7 percent since the start of the year. A total of 1.75 billion shares valued at P7.09 billion changed hands yesterday. Gainers outnumbered losers 122 to 52. There were 33 issues that were unchanged.

“The local market extended its run to a second day, and seventh in the last eight sessions.   The local market mirrored movement among its peers in the region, anticipating further monetary easing by central banks across three continents,” said Accord Capital Equities Inc.’s Jun Calaycay.

Boosted largely by strong equity flows into the local bourse, the peso closed at its highest level in four years at 41.720 to a dollar, higher than its 42.02 close last Monday. The peso was last seen this strong at 41.87 to a dollar on April 21, 2008.

BSP Governor Amando Tetangco said in a text message to reporters the rise in peso-dollar exchange rate is “broadly in line with those in the emerging markets.”

 “The Philippines is a recipient of flows of late due to the recent rise in investor appetite as well as the underlying strength of our domestic growth prospects,” Tetangco said.

BSP Deputy Governor Diwa Guinigundo, for his part, said the exchange rate is still within the range BSP targets for the year. – with Prinz Magtulis