PH shares soar to new all-time high at 4,645

Rappler.com
(UPDATED) The Philippine Stock Exchange index, an economic barometer, soared to a new historic high after two consecutive days

MANILA, Philippines (UPDATED) – Buoyed by foreign buying, the Philippine Stock Exchange index (PSEi) soared again to a new all all-time high at 4,645.86 on Wednesday, Jan. 11, 2012.

The new historic high for the economic barometer is second-in-a-row after Tuesday’s 4,561.08.

Index was up 1.86%, up 84.78 points. A total of 4.25 billion stocks worth P8.48 billion changed hands. 

The PSEi, a basket of the country’s 30 most traded, liquid and well-capitalized listed firms, is an indicator of how the investors forsee the general economy, as well as individual businesses, will perform in the the future. 

Foreign buying

“The market moved higher, driven by increased liquidity in the region as fund managers allocate their portfolio in favor of emerging economies in Asia,” said Freya Natividad, investment analyst at 2TradeAsia.com.

Net foreign buying nearly doubled to P1.95 billion, which mostly went to Philippine Long Distance Telephone Company and large-cap companies, analysts said.

“It’s still foreign buying. This type of volume can’t be all local,” said Joseph Roxas, president of Eagle Equities Inc.

While blue chips have benefited from foreign interest, undervalued second liners are starting to benefit from the influx of foreign funds in the local market reflected by the rise in Vista Land & Lifescapes Inc. and Philippine National Bank.

“The scary part is we have very limited issues. Once they go up and they start to look expensive, there’s nothing to buy,” said Roxas.

The broader all-shares index gained 44.68 points or 1.44% to 3,151.11. The property and services sub-indices led the market higher, gaining 3.37% and 3.25%, respectively.

Gainers outnumbered losers, 127 to 49, while 37 issues were unchanged. 

The country’s favorable economic prospects highlighted by a possible rate cut and a credit rating upgrade as well as the release of a stimulus fund early this year made the country an attractive investment destination.

Highest intra-day change

By mid-day Wednesday, the PSEi was up 79.54 points or 1.74% to 4,640.62.

It was the highest one-day point change since gaining 118.74 points in October 7, and the highest one-day percentage change since rising by 1.89% in December 1.

Market capitalization grew by 0.39% or P34.23 billion to a total of P8.85 trillion in the last 3 days of the rally.

While developments in Europe continues to cast a dark cloud on the horizon, positive news will have more impact on equities except for a default by Greece and a contagion in the Eurozone.

“In a way, the market’s sentiment remains negatively biased, but expectations are slowly shifting towards optimism,” said Jun Calaycay of Accord Capital Equities Corp. – Rappler.com