092007-Stocks, peso surge after Federal Reserve rate cut

Philippine stocks rose the most in almost three weeks after the US Federal Reserve cut its benchmark rate more than expected to bolster growth in the country’s biggest export market. Philippine Long Distance Telephone Co. (PLDT) and Ayala Land Inc. led the advance. “Any rate cut is always good for equities,” said Nestor Aguila, president of Market Capital Securities Inc. Overseas investors are buying stocks, including PLDT and Globe Telecom Inc., he said. The Philippine Stock Exchange Index climbed 73.23, or 2.2 percent, to close at 3,362.98. That was its biggest gain since August 30. In the broader market, 96 stocks advanced and 23 fell. PLDT advanced P50, or 1.9 percent, to P2,760; Ayala Land rose 50 centavos, or 3.5 percent, to P14.75; while Globe Telecom Inc. climbed P20, or 1.5 percent, to P1,360. Lower borrowing costs may spur spending in the US, the country’s biggest export market and No. 1 source of remittances from overseas workers. Meanwhile, the peso—along with the Indonesian rupiah—led regional currencies higher today. A Fed cut “may cause more firmness in the peso,” central bank Deputy Governor Diwa Guinigundo said. The peso gained 1.3 percent to 45.565 per dollar, the strongest since August 13, according to Tullett Prebon Plc, the world’s second-largest interdealer broker. “The dollar will weaken against most major currencies and the peso will continue to appreciate by the end of the year,” said Paul Garcia, chief investment officer at ING Asset Management.                                      Investors should buy the peso as it will rise to P44.70 against the dollar, Richard Yetsenga, a currency strategist at HSBC Holdings Plc in Hong Kong, wrote in a research note to clients yesterday. (Bloomberg)

 

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