, 2010 (MALAYA) Philippines shares rose to their highest in more than two years yesterday and the peso traded at 1-½year highs, with foreign investors showing some interest after a run of favorable economic news.

On Monday, Moody’s Investor Services affirmed the Southeast Asian nation’s sovereign credit rating, due to its strong external position and a resilient economy, although it remains below investment grade.

The main stock index rose to 3,204.22 yesterday, its highest since Feb, 21, 2008, when the PSE i closed 3211.60, before closing up 0.77 percent at 3202.17.

“Foreign investors are upbeat after Moody’s statement, while there was some window dressing as well,” said Ron Rodrigo, research head at DBP-Daiwa Securities, referring to endof- quarter buying by account managers.

The peso strengthened to 45.20 per dollar, its strongest since August 2008, data from the Philippine Dealing and Exchange Corp showed.

The stock index has risen 5.2 percent so far in March, accounting for all the market’s gains this year.

Tuesday’s rise was led by a 3.8 percent gain in property developer Ayala Corp. to P13.50, its highest close since February 2008. Its parent company, conglomerate Ayala Inc., rose 2.3 percent to P330.

Two other analysts said foreigners had shown some interest in the $140 billion stock market as a recovery in the global economy increases risk appetite after the financial crisis.

Stock exchange data showed that up to March 26, foreigners had been net buyers of just P6.4 trillion ($140 million) of shares so far in 2010, and their buying and selling had netted out over the previous two weeks.

Last week, the central bank said a favorable inflation outlook meant its key interest rate was unlikely to rise from a record low of 4 percent in the first half of the year. The broader all shares index increased by 4.74 points to 1,996.59, up 0.24 percent. Gainers edged losers 59 to 40, while 63 remained unchanged. Trading turnover reached P28.32 billion. All sub indices went up.

The high value turnover of P28.32 billion was partly on account of the three block sales in the Manila Electric Co. as Metro Pacific Investments Corp. through its Beacon Electric Asset Holdings Inc. exercised its call option on Meralco shares.

"Regional markets were up due to the improving market recovery. This was strengthened by the US consumer spending for the fifth straight month," said Seth Pangan, a trader at Diversified Securities Inc.

The National Economic and Development Authority is set to revise growth targets of 2.6 percent to 3.6 percent due to improvements in overseas remittances and growth in exports this year, Pangan said.

Moody’s move to reaffirm its stable outlook on the Philippine’s prospects, coupled by positive developments overseas might prod some bargain hunters to position Tuesday.

While profit-taking in select shares might still be seen, the effect might be muted by key headline developments, part of which includes Beacon’s expected exercise of its option in utility distribution heavyweight, MER (Meralco)," 2TradeAsia.com said in its outlook.

The government has said it was on track to beat its first quarter target for the budget deficit, and that economic growth in the first quarter was likely to be stronger than in the final three months of 2009.

Actively traded Energy Development Corp. and Philippine Long Distance Telephone Co. remained at P5.10 and P2, 475, respectively.

Ayala Corp. preferred class "B" shares shed P1 to P107 from P108, down 0.93 percent.

Ayala Land Inc. up P0.50 to P13.50 from P13, up 3.85 percent.

Bankard Inc. rose by P0.12 to P1.18 from P1.06, up 11.32 percent.

Acesite (Philippines) Hotel Corp. inched up P0.25 to P3 from P2.75, rising 9.09 percent.

Interport Resources Corp. "B" up P0.05 to P0.70 from P0.65, up 7.69 percent.

Metro Pacific Tollways Corp. down P3.20 to P5.30 from P8.50, down 37.65 percent.

Euro-Med Laboratories Phils. Inc. shed P0.42 to P1.26 from P1.68, sliding 25 percent.

Primex Corp. slid P0.35 to P3 from P3.35, down 10.45 per share. (Reuters, Dwight Sarga)

Chief News Editor: Sol Jose Vanzi

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