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PHILIPPINE stocks rose to the highest in 11 weeks
Wednesday on speculation the central bank will cut the
rate for its special deposit account, helping lower
borrowing costs and encouraging funds to shift into
equities.
Philippine Long Distance Telephone Co. (PLDT) and Ayala
Corp. led the gains. The central bank will hold its
regular policy meeting tomorrow.
“The
money-supply growth is really slow, so that gives the
central bank room to lower the rate for the special
account,’’ said Olan Caperina, who helps manage $5
billion of global assets at BPI Asset Management Inc.
“Borrowing costs will go down; economic activity will
increase and help corporate earnings in the coming
quarters.’’
The
Philippine Stock Exchange index added 92.63, or 2.5
percent, to close at 3,769.82, its highest since July
13 as the value of shares that changed hands reached the
highest in more than two months. Today’s climb rounded a
5.5 percent, three-day rally. PLDT, the nation’s biggest
company by market value, jumped P100, or 3.4 percent, to
P3,040, a record. Ayala Corp., the third-biggest
company, climbed P25, or 4.3 percent, to P605.
International Container Terminal Services Inc., the
largest port operator and one of nine stocks that rose
to at least a 52-week high Wednesday, advanced P2, or
5.4 percent, to P39. It is the stock’s biggest gain
since August 21.
The
central bank in May extended access to higher
interest-paying deposit accounts to government pension
funds, state companies and some investment trusts to
slow the pace of growth in money supply. The deposits,
previously open only to banks, pay about 50 basis points
more than the overnight rate and have slowed money
supply expansion to less than 20 percent, the central
bank’s target to contain inflation and lower interest
rates.
Expectations the US Federal Reserve will continue
cutting rates in the world’s biggest economy also
boosted demand for stocks. The number of Americans
signing contracts to buy previously owned homes fell 6.5
percent to the lowest level on record in August, after
plunging 11 percent in July, the National Association of
Realtors in the U.S. said yesterday.
The Fed
last month cut a key rate by 50 basis points in a bid to
prevent the worsening housing slump from causing a
recession. The US is the biggest market for Philippine
exports and labor.
“For me,
the data supports the outlook that the Fed will have to
cut rates some more to stabilize the housing market,’’
said Jonathan Ravelas, strategist at Banco de Oro-EPCI
Inc.
Ayala
Land Inc., the largest Philippine builder, added 50
centavos, or 3 percent, to P17.25. Bank of the
Philippine Islands, the biggest lender by market value,
rose P2, or 3 percent, to P69.50.
Shares
worth P7.81 billion were traded, 40-percent more than
the six-month daily average and the highest since August
1. Gainers beat losers 95 to 34, with 39 stocks
unchanged in the broader market.
Megaworld Corp., the second-biggest builder by market
value, added 20 centavos, or 5.1 percent, to P4.10,
after advancing 24 percent in the previous four days.
The company said it will spend P1.5 billion to develop
the initial phase of a 133-acre former airport site in
central Philippines.
First
Philippine Holdings Corp., which has investments in
power production and distribution, added P2.50, or 3.1
percent, to P83. The company will borrow $220 million to
finance the purchase of an additional 15.6-percent stake
in Manila Electric Co., First Holdings president Elpidio
Ibanez said Tuesday after trading closed.
Manila
Electric, the largest power retailer and partly owned by
First Holdings, gained P1, or 1.2 percent, to P87.50,
the highest since August 31. |
