PSEi breaks into 7,000-pt territory

MANILA, Philippines - The Philippine Stock Exchange index (PSEi) surged to a new record high yesterday on the back of strong corporate earnings, economic bullishness abroad and expectations of more fund flows.

The PSEi rallied 2.35 percent or 163.38 points to close at its 27th all-time high this year at 7,120.48, which is also the new intraday record.

The bellwether index, which erased the previous all-time high of 6,957.10 recorded on April 19, breached the 7,000 mark in the morning session.

“Prospects of special deposit accounts (rate) cut boosted investors’ confidence pushing the index past the 7,000 mark,” said Jonathan Ravelas, chief market strategist of BDO Unibank Inc.

“This stands as a manifestation of continued confidence in the prospects of our economy, not only from the international community, but also from Filipinos who are raising their stake in our country’s success,” said presidential spokesperson Edwin Lacierda.

For Freya Natividad, investment analyst at brokerage firm 2Trade-Asia.com, the main drivers for the climb drivers were Wall Street’s ascent last Friday plus robust first quarter corporate earnings.

“Buoyed by a surge in Japanese stocks which, in turn, was driven by exporters’ gains on a weaker yen, Philippine shares forayed further into uncharted territory, breaking past the 7,000-line minutes into the session,” said Justino B. Calaycay Jr., analyst at Accord Capital Equities Inc.

The market expects the Bangko Sentral ng Pilipinas to further cut this week the interest it pays to funds parked in the special deposit accounts. The move will prompt investors to seek higher yields in the stock market.

All counters, save for service sector that slipped 0.36 percent or 7.24 points to 2,026.77, were in the green. The gainers were led by holding firms that rallied 3.71 percent or 232.35 points to 6,488.07.

Calaycay said investors’ bullishness limited the retreat of the main index.

Stocks of the SM and Ayala conglomerate paced the climb yesterday.

Gainers were SM Investments Corp. (up 2.22 percent), BDO Unibank Inc. (up 2.6 percent), SM Prime Holdings Inc. (up 3.09 percent), Ayala Corp (up 5,44 percent), Ayala Land Inc. (up 2.53 percent) and Bank of the Philippine Islands (up 1.63 percent). But LT Group Inc. (down 0.64 percent) and Philippine Long Distance Telephone Co. (down 0.07 percent) bucked the trend.