MANILA, January 25, 2005 (STAR) By Des Ferriols   -  The peso surged to its strongest finish in more than 12 months, closing at 55.40 to the dollar yesterday on the back of positive economic outlook, strong dollar inflows from overseas Filipino contract workers and the general weaking of the dollar against regional currencies.

At the Philippine Dealing System (PDS), the peso hit an intraday high of 55.350 with volume turnover reaching a heavy $373.50 million. Yesterday’s closing rate was the peso’s best finish since Jan. 13, 2004 when it touched 55.40 to the dollar.

At the Philippine Stock Exchange, the 30-company composite index extended gains to fresh five-year highs breaching 2,000 points as investors bought into companies expected to announce strong results for 2004.

Analysts said investors appeared to shrug off the weekend news of Finance Secretary Juanita Amatong’s departure citing the pressure of having to oversee the government’s efforts to raise revenues to avoid an impending fiscal crisis.

The stock market ended up 27.41 points, or 1.4 percent, at 2,015.25, its best close since Feb. 10, 2000, when it finished at 2,020.15. On Friday, the index rose 1.6 percent.

Yesterday’s rally brings the total index gain since Wednesday to 5.8 percent.

"Stories surrounding the market are strong, at least for the first quarter," said PCCI Securities president Francisco Liboro.

"Investors are rising on the wave of recent positive economic indicators and a vibrant corporate outlook. It’s just so hard to stop a train full of money," said Astro del Castillo of First Grade Holdings Inc.

However, the benchmark index’s run was likely to take a pause once it reached 2,030 points, del Castillo said.

"Eventually, reality check will come along. Profit-taking is due," he said.

The commercial-industrial, banks and financial services, and mining subindexes ended higher. The all shares, property, and oil sub-indicators finished lower.

Stocks of the country’s largest oil refiner Petron Corp. were among the top contributors to the index’s advance, rising 11 percent to P3.90 after the company posted an 11 percent increase in its 2004 net profit to P3.45 billion, higher than its P3.3 billion target.

Also actively traded were Metropolitan Bank, up 3.3 percent at P31 and Philippine Long Distance Telephone Co., up 1.1 percent at P1,450, after its American Depositary Receipts in New York rose 2.2 percent Friday.

Liboro said the market’s mood is heady because investors are looking forward to a host of positive developments in the first quarter.

"You have the mining summit coming up in February, there are the strong corporate earnings coming out, then there’s the better-than-expected GDP (gross domestic product) numbers set to be released," said Liboro.

The summit comes amid renewed favor enjoyed by the mining sector after last month’s Supreme Court ruling allowing foreign investors to gain control of local mining operations. Several foreign investors have already expressed interest in taking up stakes in local mining companies.

Among the mining stocks that benefited in yesterday’s session was Manila Mining B, which closed up 21 percent at P0.034.

The government is scheduled to release 2004 gross domestic product data on Jan. 31. Last week, Economic Planning Secretary Romulo Neri said the country’s GDP growth rate likely reached 6.1 percent, outpacing government’s target of 4.9-5.8 percent.

Liboro said the only negative factor looming in the near term is an anticipated one-notch credit rating downgrade by Moody’s. But even that would be better than the two-notch downgrade earlier anticipated by financial markets, he said.

Total volume of shares traded expanded to 7.03 billion shares valued at P1.98 billion from Friday’s 5.29 billion shares valued at P1.67 billion.

Gainers led decliners 78 to 33, while 36 stocks were unchanged.

Foreign investors purchased P961.2 million and sold P574.4 million worth of shares.

Reported by: Sol Jose Vanzi

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