STOCKS SOAR TO ALL-TIME HIGH
MANILA, JUNE 5, 2007 (STAR) By Rica Delfinado and Des Ferriols - The stock market reached an all-time high yesterday, soaring 75.59 points with the key index hitting 3,622.94 points, the highest ever since the establishment of the new exchange 15 years ago.
Foreign funds continued to pour into the local market as fund managers shied away from China amid concerns authorities may introduce more measures to cool that country’s overheated stock market, traders said. (Related story on Page B-10)
Analysts said the financial markets also got a boost from Wall Street’s gains last Friday and surging Asian markets.
The composite index finished up 75.59 points at 3,622.94, surpassing the previous record close of 3,547.35 set on Friday. It touched a new trading high of 3,629.82.
The broader all-share index jumped 36.82 points or 1.62 percent to 2,303.39.
At the Philippine Dealing System, the peso gained by 46 centavos to close at a seven-year high of 45.620 from Friday’s close of 46.080 to $1.
The peso opened strong at 45.90 to the dollar and soared to as high as 45.580 during intraday trading before hitting a low of 45.980 to $1.
“The buying momentum was sustained, with many blue chips posting strong gains Monday. Fund managers could be shifting their focus away from China, where trading rules have been tightened, to other Asian markets,” said Lawrence de Leon of Accord Capital Equities.
He said it was difficult to determine at which level the current bull run will end, given the hefty trading volume.
“The bullish sentiment remains intact, but there could be some resistance at the 3,600 level,” said Ron Rodrigo at Unicapital Securities.
He said a technical pull back was imminent even as investors remained upbeat about the domestic economy, which expanded by a better than expected 6.9 percent year-on-year in the first quarter.
“The market reaction to the first quarter economic performance was strong, bolstered even further by the influx of investments into the stock market which picked up the cue from Wall Street,” traders said.
They also said the strength of the stock market had drawn foreign exchange inflows, dampening an already lackluster demand for the dollar amid more inflows from overseas workers.
Peso continues to gain ground
The Bangko Sentral ng Pilipinas (BSP) said the appreciation of the peso against the dollar is expected after the National Economic and Development Authority (NEDA) reported a strong first quarter growth.
The appreciation of the peso was also seen as a positive development especially since oil prices in the world market have been going up, dipping only yesterday following a ceasefire in Nigeria’s oil-producing areas.
According to the BSP, the rapid appreciation of the peso might prove to be a “challenge.”
“A strong peso is good for taming inflation,” said BSP governor Amando M. Tetangco.
The BSP had been worried about the impact of strong dollar inflows on domestic liquidity which could eventually trigger a rise in inflation rate over the long term.
Since a strong dollar inflow translates to more pesos in the system, the appreciation of the currency is equivalent to less pesos going into circulation than it would have if the peso were weakening.
The inflation rate has remained largely benign so far, barely moving from 2.3 percent in March to 2.3 percent in April this year.
Officials said that while the BSP’s 2007 target was not at risk, there were potential risks to its 2008 target inflation that necessitated the mopping up activity.
At yesterday’s trading at the Philippine Stock Exchange, there were 68 advancers and 49 decliners, while 50 stocks were unchanged.
A total of 3.72 billion shares worth P6.49 billion changed hands.
Top-traded Philippine Long Distance Telephone Co. jumped P55 to P2,630 while Ayala Land Inc. was up 75 centavos to P17.50.
Food and beverage firm San Miguel Corp.’s A-shares rose 50 centavos to P67, while its B-shares fell 50 centavos to P76.50.
Chief News Editor: Sol Jose Vanzi
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by PHILIPPINE HEADLINE NEWS ONLINE
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