Philippine stocks rose Friday, posting a second week of gains, after the central bank cut a key interest rate and higher sales at US retailers eased concern a housing slump will curb spending in the world’s biggest economy.

“The string of good news abroad and at home is directing funds into stocks,’’ said Tynee Tan, who helps manage about $1 billion at Rizal Commercial Banking Corp. “The cut in the headline interest rate and the stronger-than-expected sales in the US are big factors in Friday’s run-up.’’

Philippine Long Distance Telephone Co. (PLDT) led the nation’s biggest companies higher. International Container Terminal Services Inc., also known as ICTSI, rose after Deutsche Bank AG raised its share-price target by 44 percent.

The Philippine Stock Exchange index climbed 29.27, or 0.8 percent, to 3786.02 at the close, less than six points from a record set on July 5.

PLDT, the nation’s largest company by market value, gained P35, or 1.3 percent, to P2,735, the highest since January 25. Ayala Corp., owner of the largest property developer and No.2 mobile-phone operator, added P5, or 0.9 percent, to P580.

The Philippine central bank Thursday lowered its key interest rate and ended a policy of staggered rates based on the size of deposits, effectively keeping borrowing costs steady.

“The central bank’s action is helping create bullish sentiments in the market,’’ Tan said. “The central bank’s action has taken away the uncertainty over interest rates.’’

Philippine exports

IN the US, key stock indexes climbed to records Thursday as concerns abated that a housing slump will squeeze consumer spending after retailers such as Wal-Mart Stores Inc., J.C. Penney Co. and Costco Wholesale Corp. reported better-than-expected sales in June. The US is the biggest buyer of  Philippine exports and source of funds sent home by overseas Filipinos.

Megaworld Corp., the nation’s second-largest property developer, added 10 centavos, or 2.5 percent, to P4.05. First Philippine Holdings Corp., owner of the largest power retailer and third-biggest power producer, gained P1.50, or 1.7 percent, to 90.

The 33-member main Philippine stock index closed the week 0.9 percent higher, extending the previous week’s 2.5-percent gain. The measure has advanced 27 percent this year.

Separately, ICTSI, the nation’s largest port operator, gained P1, or 3.3 percent, to P31. The stock may climb P33 in the next 12 months, 44-percent more than a previous estimate, Deutsche Bank said.

Polar property

SHARE worth P6.85 billion were traded, 26-percent more than the six-month daily average. Gainers beat losers 77 to 48, with 48 stocks unchanged in the broader market.

Polar Property Holdings Corp., which has investments in real estate, rose 10 centavos, or 1.5 percent, to P6.90, rounding a 6.2-percent gain this week, the first in three weeks. The company said Thursday it may sell all its 722.62 million shares in homebuilder Vista Land & Lifescapes Inc. once the property developer proceeds with a share sale.

Vista Land, whose shares were suspended from trading Friday by the exchange, last traded at P7.10 Thursday. Based on Thursday’s level, Polar’s stake in Vista Land is worth P5.13 billion. Polar has a market value of P4.15 billion.  

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STOCK MARKET OUTLOOK 

By Honey Madrilejos-Reyes

LAST week: Shares prices rose 0.93-percent week-on-week to 3786.02 Friday, following a strong recovery on Wall Street. All sectors went up, and the market recorded P6.8 billion worth of trades at the close of Friday’s trading. 

THIS week: Jonathan Ravelas of Banco de Oro-Equitable PCI said last week’s close continues to support the view calling for a test of the 3,850 levels in the coming weeks. 

“However, the near-term risk lies at the break of the 3,600 levels,” he noted. 

STOCK Picks: Citiseconline, in its equity research, pointed at Chemrez and Petron as the top stock picks.

“Chemrez is well positioned to secure supply contracts with major fuel oil distributors given its large bio-diesel production capacity,” the report said. The company recently bagged a contract to provide coco-biodiesel to Pilipinas Shell Petroleum Corp.

The online stock brokerage firm, also projects a bright prospect for Petron.

The Petro-FCC/BTX project, which will begin in 2008 is an earnings growth driver in the next few years. We expect the new project to boost Petron’s 2008 and 2009 estimated net profit by 14.2 percent and 38.5 percent, respectively, the outlook stated.  

HONG KONG—The Philippine Long Distance Telephone Co. (PLDT) group is veering away from traditional retail voice services and is now aggressively growing an international mobile business by tapping overseas Filipino workers, or OFWs,

Basic Energy needs P1.5B for development

PUBLICLY traded Basic Energy Corp. is borrowing P1.3 to P1.5 billion to help fund the ethanol development project of newly acquired unit Zambo Norte BioEnergy Corp.

INFORMATION technology icon IBM said it will still keep a big part of its global business initiative focused on small-and-medium-sized businesses (SMBs), where the company has made substantial gains over the past few years.

AMID interests from at least two power-generating companies to expand one of the country’s natural gas-fired power plants or put up an additional natural gas power facility in Batangas, the government remains undecided over what to do with the San Pascual power purchase agreement (PPA), Energy Secretary Raphael P.M. Lotilla told BusinessMirror on Saturday.

Philippine stocks rose Friday, posting a second week of gains, after the central bank cut a key interest rate and higher sales at US retailers eased concern a housing slump will curb spending in the world’s biggest economy.

While other real-estate companies such as MegaWorld Corp. are increasingly going into joint ventures (read: somebody provides the land and the real-estate company develops the land), Ortigas & Co. Ltd. Partnership (OCLP) prefers to go it alone because of its huge land bank.