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THE
Philippine stock index Thursday advanced on mounting
speculation the US Federal Reserve will cut interest
rates, helping avert a recession in the Southeast Asian
nation’s biggest overseas market for labor and goods.
International Container Terminal Services Inc. (ICTSI)
advanced the most in almost two years while Philippine
Long Distance Telephone Co. (PLDT) jumped to a
month-high. San Miguel Corp. climbed the most in six
months on prospects a 21-year-old ownership dispute
between the government and company chairman Eduardo
Cojuangco is nearing a resolution.
Manila
Electric Co. (Meralco) and Jollibee Foods Corp. paced
gains among consumer-related stocks after the government
said the economy grew 6.6 percent in the third quarter,
bringing the nine-month expansion to 7.1 percent. The
government forecasts the economy to grow 7 percent this
year, topping the 6.7-percent ceiling of its previous
estimate.
“A rate
cut will ease worries of a recession in the US and send
a strong signal that the Fed will not allow a hard
landing,’’ said Jonathan Ravelas, strategist at BDO
Unibank Inc. “The data shows a positive Philippine
economic outlook. Consumer spending is still
resilient.’’
The
Philippine Stock Exchange index added 41.55, or 1.2
percent, to close at 3,578.55, the highest in eight
days. The measure surged as much as 3 percent before an
alleged coup plotter walked out of a court trial
accompanied by armed soldiers and called for a
demonstration rally against President Gloria Macapagal-Arroyo.
International Container, the largest port operator,
advanced P5, or 12 percent, to P47, its biggest gain
since January 2006. PLDT, the nation’s largest company
by market value, gained P85, or 2.8 percent, to P3,100,
its highest close since October 19. Ayala Corp., owner
of both the nation’s biggest developer and largest bank
by market value, climbed P10, or 1.8 percent, to P560.
US
stocks last night posted the biggest two-day rally in
five years after Federal Reserve vice chairman Donald
Kohn said market “turbulence’’ may reduce credit to
businesses and consumers, boosting expectations for
another interest rate cut when the central bank meets
December 11.
Odds of
a half-point cut rose to 8 percent from 2 percent, while
the expectations of a reduction of any size remained 100
percent.
Over a
third of the estimated more than 8 million overseas
Filipinos live and work in the US, which buys almost a
fifth of Philippine shipments. Exports make up 40
percent of the Philippine economy and funds from
overseas Filipinos contribute at least 10 percent,
fueling spending on food, mobile phones, cars and homes.
The
Philippine government earlier Thursday said consumer
spending rose 5.6 percent in the third quarter, helping
sustain the fastest consecutive growth in at least two
decades. The economy may grow 7 percent in the fourth
quarter, the government said.
Meralco,
the nation’s largest power retailer, gained P1.50, or
2.1 percent, to P72.50. Jollibee, the largest fastfood
company, surged P1.50, or 3.1 percent, to P49.50, after
advancing as much as 6.3 percent.
“Philippine third-quarter data shows a stable economy
that is sustaining growth moving forward,’’ Ravelas
said. “The fundamentals are there. Investors shouldn’t
throw away this opportunity because of a political
noise.’’
SM Prime
Holdings Inc., the largest shopping mall operator,
gained 25 centavos, or 2.2 percent, to P11.50. Megaworld
Corp., the second-largest builder, jumped 10 centavos,
or 2.6 percent, to P3.90, retreating from a gain if as
much as 5.3 percent.
Separately, San Miguel Class A shares, equity reserved
for Filipinos in the largest Philippine food and drinks
company, gained P3, or 6.4 percent, to P50, its steepest
climb since May. Its Class B shares, which have no
ownership restrictions, added P3, or 6.3 percent, to
P50.50.
The
Philippine antigraft court Wednesday dismissed the
government’s claim over Cojuangco’s stake in San Miguel
that has been the subject of a legal dispute since the
assets were seized in 1986. Cojuangco’s stake in San
Miguel was 20 percent when the government confiscated
the shares on allegations that the stocks were acquired
using public funds.
Shares
worth P7.57 billion were traded, 38 percent more than
the six-month daily average and the highest since
October 5. More than two stocks fell for each that
gained in the Philippine Stock Exchange.
Aboitiz
Power Corp. (AP PM), owner of the second-and
third-biggest power retailer, gained 30 centavos, or 6.3
percent, to P5.10. A venture led by the company made the
highest bid of $325 million for a 175-megawatt
Philippine government hydroelectric power plant complex.
GMA
Network Inc. (GMA7 PM), the second-largest Philippine
broadcaster, added 20 centavos, or 2.6 percent, to
P7.80. The company said 10-month profit rose 22 percent
to P2.06 billion, after posting this year’s biggest
monthly net income in October, when sales breached a
record P1 billion. GMA Network’s depositary shares (GMAP
PM), each of which is backed by a common share, gained
20 centavos, or 2.6 percent, to P7.8. |
