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PHILIPPINE stocks rose Wednesday, lifting the benchmark
from its biggest drop in eight weeks, after the Federal
Reserve eased investor concern a slowdown in the housing
market would drag the US into a recession.
“The
impact of the housing slump in the US isn’t as bad as
investors had expected,’’ said Joel Mendoza, strategist
at lender BDO Private Bank. “Yes, the
US will be hurt by the housing crisis but it will not be the
Doomsday scenario as feared.’’
Ayala
Land Inc. and Metropolitan Bank & Trust Co. (Metrobank)
led the advance among the nation’s largest sustained
consumer spending in the US, the biggest overseas market
for Philippine goods and labor, will boost companies on
speculation earnings. Philippine Stock Exchange Inc.
jumped to a record after it was rated “overweight’’ in
JPMorgan Chase & Co.’s initial coverage of the stock.
The
peso, which is at its strongest against the US dollar in
seven years, is also helping stocks rise,
Mendoza
said. A strong currency helps boost consumer spending,
contains inflation and lowers the price of imports,
supporting the outlook for Philippine economic and
earnings growth, he said.
The
Philippine Stock Exchange index jumped 58.71, or 1.6
percent, to 3,834.71 at the end of trading, after
sliding 2.5 percent Tuesday from its highest close.
Ayala Land,
the biggest Philippine builder by market value, rose 25
centavos, or 1.5 percent, to P17.25. Metrobank, the
third-largest lender by market value, added P2.50, or 4
percent, to P65.50.
The Dow
Jones Industrial Average and Standard & Poor’s 500 Index
Tuesday advanced to records after minutes showed Fed
members avoided language that may have suggested the
US
economy will contract. Policymakers backed a decision to
cut the benchmark-lending rate by half a percentage
point at the September 18 meeting and said a decline in
inflation will probably be sustained.
The US
buys almost 20 percent of Philippine exports and
provides half of the funds sent home by overseas
Filipino workers. Exports account for 40 percent of the
Philippine economy, while remittances contribute at
least 10 percent, spurring Philippine consumer spending
on food, mobile phones, cars and homes.
Ayala
Corp., the second-largest Philippine company by market
value, gained P25, or 4.5 percent, to P585. Megaworld
Corp., the No. 2 builder and which makes 20 percent of
its home sales to Filipino workers abroad, jumped 20
centavos, or 5.1 percent, to P4.10.
The peso
has risen 4 percent in the past three months, the fourth
biggest gainer among currencies in the Asia Pacific
region, according to Bloomberg data.
“A
stronger peso is more positive than a weaker currency,’’
Mendoza said. “It’s good for companies with dollar
debts, it lowers the government’s overseas debt in peso
terms and helps improve purchasing power of consumers
because imports become cheaper.’’
Manila
Water Co., which will borrow from abroad part of its
P30-billion investment requirement in the next five
years, jumped P1.25, or 8.2 percent, to P16.50, its
biggest gain since August 21. Petron Corp., the nation’s
largest oil refiner, climbed 50 centavos, or 8.5
percent, to P6.40.
Philippine Stock Exchange, the sole operator of the
country’s equities market, jumped P90, or 11 percent, to
P910, a record. Harsh Wardhan Modi, an analyst at
JPMorgan, recommended investors be “overweight’’ on
shares of the company in initial coverage of the stock.
Its price may rise to P1,400 in the next 12 months, Modi
said.
Shares
worth P4.8 billion were traded, 14-percent less than the
six-month daily average. Gainers outnumbered losers 84
to 38 on the broader market.
---Bloomberg |
