PESO CLOSES AT NEW 6-YR HIGH / MARKET CONTINUES TO RISE
MANILA, MAY 9, 2007 (STAR) By Des Ferriols - Strong dollar inflows spurred by rumors of a possible ratings upgrade propelled the peso to a new six-year high yesterday, closing at 47.26 to a dollar as foreign investors started buying into local shares.
At the Philippine Dealing System (PDS), the peso opened at 47.33 to the dollar and gathered momentum throughout the day’s session until it closed at its intra-day high of 47.26 to the dollar.
Market sources said the strength of the currency was buoyed by reports that Standard & Poor’s (S&P) could upgrade its stable outlook on the country’s ratings when its sovereign debt review is released after the elections.
Traders said the market was also reacting to the pronouncements made by the Bangko Sentral ng Pilipinas (BSP) that it was not too concerned about the strength of the peso as long as it still reflects the country’s economic fundamentals.
"Higher dollar reserves are giving the peso another boost," said Ed Garcia, a currency dealer at East West Banking Corp.
Moreover, the peso is expected to remain strong and possibly gain even more momentum as dollar inflows reach one of the main annual peaks right before the opening of classes in June.
"Right about now people are enrolling their kids," said one trader. "That means more dollar inflows from overseas workers."
Market continues to rise on Wall St rally The Philippine Star 05/09/2007
Share prices closed 0.12 percent higher yesterday aided by a rise on Wall Street overnight which extended its record run to five days amid frenzied takeover activity, dealers said.
They said the composite index also breached the 3,325-point resistance level as some investors took their cue from the Dow Jones bull run.
The composite index edged up 4.06 points to settle at 3,333.95. It moved between 3,329.89 and 3.357.88. The broader all-share index rose 9.55 points to 2,121.04.
Gainers beat losers 60 to 44, while 57 stocks were unchanged. A total of 2.6 billion shares worth P4.7 billion were traded.
The Dow Jones Industrial Average crossed 13,300 for the first time on Monday, securing its 20th record close since the start of the year.
Other investors meanwhile were cautious ahead of the May 14 midterm elections.
"We have to confirm in the next few sessions if that level can hold. If it does, the next resistance would be 3,400," said Gomer Tan of Regina Capital Development Corp.
Tan said while market sentiment was bullish in general, investors will likely continue to be guarded ahead of next Monday’s congressional elections.
"If the political exercise is peaceful though, the market will likely go up since a credit rating upgrade (for the Philippines) is expected after the polls," added Tan.
Most international credit rating firms have put their review of the country’s credit ratings on hold, opting to wait for the results of the elections.
Top-traded Philippine Long Distance Telephone Co. (PLDT) shed P15 to P2,550 after the release of flat quarterly profits, reflecting the market’s disappointment.
But PLDT chairman Manuel Pangilinan said the company expects its core profit for the full year to come in at P33 billion, the top end of its guidance.
Globe Telecom gained P45 to P1,290.
Property developer Ayala Land climbed 25 centavos to P18.25. Megaworld Corp. fell P5 centavos to P3.50.
San Miguel Corp.’s A-shares were steady at P64.50, while its B-shares closed up P1.50 at P75. San Miguel was to announce its first quarter results later Tuesday. — AFP
Chief News Editor: Sol Jose Vanzi
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