PESO, STOCKS SURGE ON SMOOTH RP ELECTIONS
MANILA, MAY 12, 2010 (STAR) By Zinnia B. Dela Peña - The country’s stock and currency markets surged yesterday – bucking the downtrend in the Asian region – as investors cheered the relatively peaceful conduct of the national elections, traders said.
Local share prices surged to an eight-month high yesterday with the main index, the PSEi, jumping 120.87 points or 3.8 percent – its biggest percentage gain since Aug. 24, 2009 – to 3,262.93.
The broader all-share index went up 3.54 percent or 69.65 points to 2,036.42 as advancers swamped decliners, 117 to 12, while 32 issues were unchanged.
A total of 1.76 billion shares valued at P6.08 billion were traded.
In contrast, world stocks fell yesterday as a relief rally triggered by a $1-trillion plan to contain Europe’s debt crisis fizzled out.
Europe opened lower and most Asian markets failed to sustain gains for a second day running after initially trading higher following Monday’s broad advance.
The Philippines on Monday held its first automated national elections with consistent survey leader Sen. Benigno “Noynoy” Aquino III, only son of democracy icons Ninoy and Cory Aquino, taking a commanding lead in the computerized tally.
At the foreign exchange market, the Bangko Sentral ng Pilipinas intervened yesterday to cap the rising peso, which was boosted by Aquino’s strong showing and a massive $1-trillion euro zone rescue package.
The peso jumped just over one percent to its intraday-high of 45.005 per dollar, but its strength was tempered by the central bank’s dollar-buying intervention.
But traders still expect the unit to break the 45 level soon.
“They (the central bank) just want to smooth out volatilities in the dollar/peso. Eventually if dollar/Asia continues to trade lower, 45 should be tested,” a trader said.
The peso fell 2.4 percent last week as preparations for the first change in Philippine leadership in almost a decade were hampered by reports of problems with ballot machines, leading some sectors to speculate a widespread failure of elections.
The local currency was biggest gainer yesterday among the 10 most active currencies outside of Japan.
Astro Del Castillo, managing director at investment advisory firm First Grade Holdings Inc., said the Philippines seemed to have pulled off a successful historic computerized election despite some machine glitches, long lines at the polling precincts, and several incidents of shootings and bombings.
“The peaceful holding of the polls and strong performance of global markets boosted investor confidence. It was an iron-clad rally boosted by commitments to stave off a European debt crisis. I think these two factors were enough to boost the local market,” Del Castillo said.
He said the market is expected to maintain its positive momentum in the next few days. “The most important thing is the pulse of people was heard. We have to respect the will of the people. We have more reasons to trek to a higher level. Fundamentally, we’re OK and most analysts are expecting this year will be a better one than the previous year,” he said.
Del Castillo advised investors to wait for the market to correct prior to taking positions.
Aquino, a presidential front runner, owes much of his popularity to his parents — his father Ninoy was an opposition leader assassinated during the administration of President Marcos while his mother Cory assumed the top post of the land during the People Power revolution in 1986 that eventually led to the exile of Marcos and his family.
The top three most active stocks yesterday were Philippine Long Distance Telephone Co. (PLDT) which rose 1.22 percent or P30 to P2,495, Aboitiz Power Corp. (up by P10 closing at P16.50) and Energy Development Corp. (EDC), which went up 3.8 percent to P5.40.
Bucking the general rally was property holding firm Vista Land and Landscapes, which fell 1.1 percent to P1.74 apiece, after its owner, Sen. Manuel Villar, accepted defeat in the presidential race.
Postscript HIDDEN AGENDA By Mary Ann Ll. Reyes (The Philippine Star) Updated May 12, 2010 12:00 AM
The people have spoken. Benigno Simeon “Noynoy” Aquino III is the 15th president of the Republic of the Philippines.
That he won by an overwhelming margin is no surprise. After all, those who rallied behind him and supported his bid were true believers in what he stood for.
I am surprised though with the way the vice-presidential race turned out. That Mayor Jejomar “Jojo” Binay will lead the race, sans a small margin against Mar Roxas, was a disappointment, at least for me. After all, I am not impressed by what he did for Makati, the country’s premier district. And allegations of corruption against him have not gone away. I also am not in favor of the political dynasty he has created in Makati. His son as mayor and his daughter as a member of the House of Representative? C’mon. He managed to become the vice-president without abandoning his fiefdom. At least Bayani Fernando sacrificed losing his family’s hold on Marikina when he decided to go for the vice-presidency.
The top 12 in the senatorial race is also a big disappointment. Obviously, it was not about qualification but about who is the most popular. I never saw a political ad of Tito Sotto and Lito Lapid but they managed to win. Bong Revilla and Jinggoy Estrada as the frontliners? What are the voters thinking?
We have moved from manual to automated elections but politics in this country has remained the same. Former President Joseph Estrada hardly spent for campaigning but he managed to get more votes than the biggest spender in the 2010 elections, Manny Villar. Gloria Macapagal Arroyo won in the Pampanga congressional race, although we doubt whether those who voted for her have any inkling as to the repercussions of GMA being in the House of Representatives. If she becomes speaker of the House, she will definitely not give Noynoy an easy time.
Meanwhile, the voters view the automated election in different ways. Personally, I found the oval-shaped portions of the ballot that I was supposed to shade as too small. And of course, there are a lot of reports about PCOS machines not working, of the transmission of the certificates of canvass being delayed. True, the process of counting the votes is faster but it’s another thing concluding that it is more reliable or that the election is more credible.
And now, the task of rebuilding this nation begins for Noynoy. It is his chance to prove to all and sundry that he deserves the votes he got, including mine.
Danding out of SMC?
Is San Miguel Corp. (SMC) chairman and CEO Eduardo “Danding” Cojuangco Jr. bowing out of SMC?
What started out as a rumor is turning out to be factual.
SMC has confirmed that based on the documents submitted by Top Frontier Investment Holdings, Inc. to the Securities and Exchange Commission (SEC) in connection with the tender offer initiated by Top Frontier for common shares of stock of SMC, 44 corporations associated with Cojuangco executed an agreement with Top Frontier granting the latter an exclusive option to acquire a total of 493.3 million common shares of SMC until Nov. 19, 2012, at an option price of P75 per share.
We can only surmise as to the reason behind this move. Some say the sale of his SMC stake has something to do with succession problems, just like what businessman Lucio Tan is experiencing with his own empire. They believe that this strategy is meant to keep SMC’s management in the hands of people who are fit to run the company while at the same making Cojuangco’s heirs content by distributing his wealth while he is still alive as part of estate planning.
Others say this is just the natural order of things. He is 75 years old and SMC is in good hands. The company has grown from a food and beverage company to a holding company with investments in very profitable assets and ventures. Cojuangco can bow out of SMC with a large smile on his face.
Chief News Editor: Sol Jose Vanzi
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