MANILA, December 4, 2003  (STAR) By Rica D. Delfinado - The stock market rose yesterday to its highest level in three weeks as the peso’s recovery against the dollar inspired bargain-hunting on select blue chips, led by top telecom firms Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom.

The Philippine Stock Exchange (PSE) composite index added 20.93 points to 1,357.76 points, its highest close since Nov. 12 when it ended at 1,363.53.

Analysts said the peso’s steady recovery helped sentiment, with investors taking advantage of a lull in the political infighting in the run-up ahead of the May presidential polls for the traditional year-end rally.

"The market is recovering after its knee-jerk reaction to the peso fall, political developments and warnings of downgrades from international credit ratings agencies," said AB Capital economic analyst Jose Vistan.

"There are still believers in the Philippine economy and they see that it can overcome these uncertainties."

The peso has slowly regained strength after falling to a record low of 55.850 to the dollar last week, helped by strong dollar inflows from overseas Filipino workers (OFWs).

At the Philippine Dealing System (PDS), the peso strengthened by another 11 centavos, settling at 55.380 from Tuesday’s close of 55.490 to the dollar.

The peso opened at 55.450 before hitting a high of 55.350 and a low of 55.450 to $1. Traded volume amounted to $130 million on an average rate of 55.402 to the dollar.

Traders said thinning corporate demand and easing political concerns were also underpinning the peso’s recovery.

Philippine Long Distance Telephone Co. (PLDT), the country’s largest telecommunications firm, rose 1.24 percent or P10 to P815. It was the most actively traded stock.

Second-ranked Globe Telecom ended 2.03 percent or P15 higher at P755.

"The two companies belong to the fastest growing industry right now. They show the brightest prospects in terms of earnings, making them the punters’ favorite stocks," Vistan said.

Buying interest in Ayala Corp., the Philippines’ largest conglomerate, also buoyed the market. Ayala Corp., which said on Tuesday it would offer up to P1.5 billion of preferred shares to pay off maturing obligations next year, rose 1.02 percent or five centavos to P4.95.

In the broader market, 44 stocks rose, 16 fell and 38 were unchanged.

Turnover dipped to P571.13 million from Tuesday’s P695.17 million.

RCBC Securities in a client report said political concerns ahead of May’s presidential election will continue to make investors cautious, which may temper the market’s traditional yearend rally.

"Investors may opt to wait for the political waters to clear up before aggressively positioning into selected blue chips. In effect, the market may, therefore, consolidate at its current trading range," RCBC Securities said.

For his part, Lawrence de Leon of Accord Capital Equities said "there are still no signs that the bargain-hunting interest that emerged Monday is weakening.

"The improving peso and a relatively quiet political environment helped to keep sentiment positive. This could be the start of the yearend rally as investors may now be doing their window-dressing or positioning for next year," he said.

Power distributor Manila Electric Co. (Meralco) continued to attract interest after the company said it expected to gain P1.9 billion next year after regulators allowed it to hike rates by about two percent.

Its B shares, which are open to foreigners, rose 1.06 percent or 25 centavos to P23.76. "A" shares, which are restricted to Filipinos, were unchanged at P15.

"Our initial estimates point to a net income of P4 billion for Meralco in 2004, considering the rate adjustment, in view of better economic performance and in line with the May elections that should expand electricity sales," RCBC Securities said.

Meralco earlier said it was hoping to make a net profit of P1 billion in 2003.

The all-shares index was up 5.17 points at 852.68. The commercial-industrial index rose 19.39 to 2,030.62, property was up 17.89 at 558.45 and mining up 47.07 at 1,683.27.

Reported by: Sol Jose Vanzi

All rights reserved