New milestones: PSEi breaks 6,000 level, posts 4th all-time high
MANILA, Philippines (2nd UPDATE) - The Philippine Stock Exchange index (PSEi) continued its rally and broke two new records on Monday, January 7: it breached the 6,000 level for the first time and hit a new record high 4 trading days in a row this new year, 2013.
The PSEi closed at -- and hit a new intraday high of -- 6,044.91, up 1.23% or 73 points from Friday's closing.
In an interview on ANC, April Lee-Tan, the head of research of Col Financial Group, Inc., said investor appetite for stocks was buoyed by the US "fiscal cliff" deal, the launch of the European Central Bank's new bond-buying program, and the continuing optimism about the growth of the Philippine economy in 2013, an election year.
"The very positive outlook on the Philippines is something that people are aware of since last year. If you go to briefings by brokers, talk to analysts, nobody will say anything bad about the Philippines," she said.
"During the second half of 2012, everybody was expecting 2013 to be a very good year, that is already being reflected in share prices, coupled with liquidity, that is what is driving the market right now," she added.
Jun Calaycay of Accord Capital Equities said breaching the 6,000-level had been expected.
"The debates will now centre on whether the economy in general and listed firms in particular can provide the necessary numbers to justify and sustain trades above that level," Calaycay said.
And Reynaldo Montalbo, a senior vice president of First Metro Investments Corp, said the market, which grew almost 33 percent in 2012, would likely rise further this year as interest rates ease on the back of expected stronger economic growth.
He also highlighted the growing prospects the country's credit rating will be raised to investment grade, according to Dow Jones Newswires.
Traders flashed the "More Fun at 6,000" and the number seven (7) signs on the trading floor yesterday (in the photo above) indicating the next crucial index ceiling.
"We are very proud to have reached and breached the 6,000 level which affirm that market liquidity continues to be strong and investor sentiment remain positive over good news both locally and abroad," PSE President and Chief Executive Officer Hans B. Sicat said.
"We also believe that corporate earnings will remain strong for the full year of 2012, which should support the market's phenomenal performance. Indeed it is more fun at 6,000 and we look forward to setting new records this year," he added.
Breaking 6,000 level
Breaching the 6,000 level came sooner rather than later.
Just a little over 10 minutes after the opening bell Monday morning -- at around 9:41 a.m. -- the main PSE index (PSEi) hit 6,001.17.
This new milestone for the stock exchange came over a month after PSE chairman Jose Pardo told President Benigno Aquino III that the benchmark index will reach the 6,000 historic level "sooner rather than later."
In his keynote address at the anniversary dinner of PSE last December 3, Aquino himself told stock market officials and investors that "the PSEi may break the 6,000 level within the next 28 days."
Aquino also was at an event at the PSE trading floor to ring the bell at the PSE trading floor to mark celebrations after the PSEi hit 5,000, then the all-time high. That was in March 2012.
This is the 65th record high under the Aquino administration, which campaigned on a good governance agenda and has been pursuing reforms, including the historic passing of the sin tax law, which aims to raise additional revenues for the government.
The PSEi soared in 2012, re-writing record all-time highs 38 times, and earning the badge as the second-best performing exchange in Southeast Asia, next to Bangkok's.
The performance of the stock market, particularly the PSEi, is an indicator of investor confidence in the country.
In 2012, investors, particularly foreigners, flocked to safe-havens like the Philippines, buoyed by stellar performance of the local economy, one of the world's fastest growing.
The total capital raised through initial public offerings (IPO), follow-on offerings, stock rights and private placements reached P219.07 billion, a record high. Foreigner investors, including those who used to snub the Philippines, accounted for half of the total capital raised.
The continued to appreciate on Monday as it closed at P40.89 to the dollar.
This was stronger than the P40.91 close on Friday, January 4.
In 2012, the Philippine peso was regarded as the best-performing Southeast Asian currency as it appreciated 6.53% to the greenback.
The average exchange rate in 2012 was around P42.228 and posted the the biggest annual gain since a 19% appreciation in 2007. - Rappler.com with reports from Agence France-Presse