New high: PSEi breaches 7,400

The PSEi continues its post-election rally as it nears the 7,400 mark


MANILA, Philippines (4th UPDATE) – May 15 marks another one for the books for the main index of the Philippine Stock Exchange, one of the world’s best performing. 

On Wednesday, May 15, the PSE main index (PSEi) breached 7,400 level for the first time and ended trading with the 31st record close.  

The PSEi hit a new intraday high 7,403.65, before retreating to 7,392.2, up 1.08% or 78 points when trading closed.

The PSEi has been on a roll. A day before, the index pierced the 7,300 level and closed with the 30th record high for 2013

The sustained investor euphoria was largely attributed to the mid-term elections on May 13, considered as ‘generally peaceful.’ The administration bets captured majority seats in the Senate and House of Representatives, and local posts, assuring continuity of programs until 2016.  

“Preliminary results continue to favor administration candidates. (This is) a validation of the president’s mandate. This should see continuation of economic reforms needed to sustain the present gains. This lifted investor sentiment causing share prices to rise further,” BDO vice president and chief market strategist Jonathan Ravelas said.

Some of the factors cited for the rally in 2013 include the two investment grade ratings given by Fitch Ratings in March and Standard & Poor’s in April, as well as the record highs the US markets have been hitting.

The PSEi has been on a rally since 2012 when it hit 36 all-time highs.

A total of 3.05 billion shares worth P21.39 billion changed hands at the exchange on Wednesday. Foreign buying and selling reached P14.84 billion and P8.04 billion, respectively.

Other markets

Other markets have also been reaching record highs.

Tokyo stocks soared 2.29% on Wednesday to close at their best level in over 5 years, following record-setting gains on Wall Street and on the back of a weak yen.

The benchmark Nikkei added 337.61 points to close at 15,096.03, the highest finish since December 28, 2007, while the Topix index of all first-section shares ended up 1.79%, or 22.05 points at 1,252.85.

“Renewed yen weakening should help Japan stocks to set fresh highs, helped by fresh investor fund flows and faith in an accelerating global economy,” said SMBC Nikko Securities general manager of equities Hiroichi Nishi.

Trading on Japan’s premier bourse was heavy, with “the numbers reflecting a wide range of participation — from domestic individuals to overseas foreign funds, and could lend strong staying power to the market”, Yoshihiro Okumura, general manager at Chibagin Asset Management, told Dow Jones Newswires.

Foreign investors have been piling into the Tokyo market in recent months, helping send it rocketing to multi-year highs as a new government in Japan vows to stoke the long-stagnant economy.

A sharply weaker yen, pushed down by huge easing moves from the Bank of Japan, has helped inflate financial results for Japanese exporters. The weakening currency makes Japanese firms more competitive abroad and boosts the value of repatriated foreign income.

In forex trade, the dollar bought 102.21 yen, hardly changed from levels in New York late Tuesday.

Overnight, US stocks surged to new all-time closing highs on renewed optimism after a prominent hedge fund manager said the stock rally of 2013 still had room to go higher.

The Dow Jones Industrial Average rose 0.82% to a record 15,215.25 while the broader S&P 500, also reaching a new high, added 1.01% to 1,650.36. – Rappler and Agence France-Presse

 

 

 

 

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