051707: RP stocks advance to 10-yr. high

By Ian C. Sayson

Bloomberg

THE Philippine stock index Wednesday climbed for a third day to the highest in more than 10 years, on speculation the result of Congressional elections will not hamper President Gloria Macapagal-Arroyo from managing the economy. “There is optimism that Mrs. Arroyo will maintain control of both chambers of Congress,” said Fitzgerald Aclan, who helps manage $2 billion of assets at Banco de Oro in Manila. “It appears that her opponents who will make it to the Senate are not the anti-Arroyo hardliners.” San Miguel Corp. and Metropolitan Bank & Trust Co. led gains among the nation’s biggest companies. Filinvest Land Inc. rose after the company said first-quarter profit grew 64 percent. Manila Electric Co. (Meralco) fell as investors took advantage of recent gains. The Philippine Stock Exchange index added 0.47, or less than 0.1 percent, to 3409.20 at the close in Manila, after climbing 1.3 percent Tuesday to the highest since February 3, 1997. The index is up 14 percent this year. The measure is less than 40 points away from its record 3447.60, a level it closed at on February 3, 1997. It breached that level earlier Wednesday, when it rose as much as 1.3 percent. “Some investors took the climb to a record as an opportune time to pocket their gains, that’s why we see some stocks like energy ending the day lower,” said Astro del Castillo, managing director of First Grade Holding Inc., a financial management and advisory company in Manila. Class A shares of San Miguel, equity reserved for Filipinos in the nation’s largest food and drinks company, gained P4, or 5.3 percent, to P80, a record close, according to data that runs until January 1990.   Meralco falls METROBANK, the nation’s largest lender by asset, rose 50 centavos, or 0.8 percent, to P63, a two-week high. Bank of the Philippine Islands, the nation’s largest lender by market value, gained 50 centavos, or 0.8 percent, to P67.50, rounding a three-day, 4.7 percent advance. Meralco’s Class A shares fell P3, or 3.7 percent, to P78, its biggest loss since March 14. The stock’s 14-day relative strength index, a measure made up of changes in its share price in the past two weeks, was at 71.  A score over 70 is a signal that the stock is poised to fall. Meralco’s Class B shares, equity in the nation’s largest power retailer which have no ownership restriction, declined P3.50, or 4.3 percent, to P77.50, trimming this year’s gain to 41 percent. The Philippines on May 14 held its mid-term elections, putting at stake 12 seats of the 24-member Senate, and all of the 230 seats in the House of Representatives. Mrs. Arroyo’s allies are expected to grab two-thirds of the House while her opponents, who include former ally Manuel Villar and Loren Legarda, are expected to get six of the Senate seats up for grabs.   Policy disruption unlikely “ARROYO’S opponents are not likely to get the numbers needed to impeach her or disrupt her program,” Aclan said. “Philippine politics aren’t strictly divided along party lines.” SM Investments Corp., the nation’s third-largest company by market value, added P10, or 2.6 percent, to P402.50, a three-month high. Manila Water Co., the nation’s most profitable water utility, rose 25 centavos, or 2.1 percent, to P12. Stocks also rose after the central bank said money transfers from Filipinos working overseas, which make up 10 percent of the economy, rose at a faster pace, expanding 26 percent in March to $1.3 billion. The remittances sent home are funding spending on food, phones and homes.   Megaworld, Meralco MEGAWORLD Corp., one of the nation’s biggest builders of residential towers and which sources at least 25 percent of home sales from overseas Filipinos, rose 10 centavos, or 2.6 percent, to P3.90. Belle Corp., a builder of a high-end mountain resort south of Manila, added 2 centavos, or 1.5 percent, to P1.40, extending this year’s gain to 25 percent. Filinvest Land, the nation’s largest builder of affordable homes, jumped 8 centavos, or 4.7 percent, to P1.80, its biggest gain since March 13. The builder said Tuesday after trading closed that its net income in the first quarter grew 64 percent to P252 million as it sold more homes. JG Summit Holdings Inc., owner of the nation’s largest snacksmaker, fell 25 centavos, or 2 percent, to P12. The company said Tuesday after trading closed that first-quarter profit declined by more than half from a year ago to P1.75 billion due to absence of one-time gains. Separately, national treasurer Omar Cruz said earlier Wednesday that the government probably had its second budget surplus this year in April. The government targets to end years of budget gaps by 2008. Shares worth P6.05 billion were traded, 42 percent more than the six-month daily average. Losers beat gainers 59 to 58, with 51 stocks unchanged in the broader market.

 

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