RP stocks recover due to inspiring economic data

Local share prices posted a significant recovery for the second straight session on Thursday, with investors ignoring Wall Street's slight drop overnight and focusing on good news on the local front. The Philippine Stock Exchange index surged by 1.81 percent or 51.64 points to 2,908.88, with subindices rising across the board as buyers also hunted for bargains and snatched mostly blue chips. "Investors focused more on domestic data such as exports. The fact that it was the second straight month of yearly advance was encouraging," analyst Justino B. Calaycay, Jr. of Accord Capital Equities Corp. said in an interview. He also cited the central bank announcement on Wednesday of faster lending growth in December, which monetary authorities said suggests growing confidence of business and households as financial and economic conditions stabilize. "People and institutions are going to the bank for money, which will later translate into productive uses," Calaycay pointed out. The US stock market managed to steady itself on Wednesday after hearing Federal Reserve Chairman Ben Bernanke's plans to withdraw the central bank's support for the economy. The Dow Jones industrial average closed 20 points lower after falling nearly 100 in early trading. On the local front, gainers beat losers 77 to 14, while 51 stocks were unchanged. Calaycay said volume was still thin at 1.13 billion stocks worth P2.64 billion. "I don't think the rise was as big. The value was a little below the cumulative average, which tells you that the advance was not as strong to be sustainable. But at the same time, it's not weak," he said. On Friday, he said, "a modicum of profit-taking" will put to the test the 2,870-point support level. "A possible sustained advance will see [the index] at 2,920 to 2,930," he added. Brokerage 2TradeAsia predicted follow-through buying on Thursday as well as the comeback of foreign stock buyers. "The general theme rests on world fund managers' expectations [that] coordinated efforts will be visible to ensure financial fallout repetitions will be avoided, and the pace of economic rebound for 2010 will be equitably supported," it said in a report. Holdings firms led the day's surge with its 3.24-percnet or 51.07-points gain to 1,625.92, followed by financial stocks, which went up by 2.96 percent or 17.54 points to 611.09. Property companies also expanded by 1.74 percent or 16.84 points to 987.29, while industrial shares added 1.42 percent or 61.88 points to 4,417.64. The mining and oil index likewise gained 1.42 percent or 131.57 points to 9,395.19, while services inched up by 0.62 percent or 9.02 points to 1,471.95. The all-share index went up by 1.59 percent or 29.03 points to 1,856.2. "Although investors were buying, they were channeling their funds to safer and more established companies," Calaycay pointed out. Fifteen of the 20 most actively traded stocks gained, led by dominant carrier Philippine Long Distance Telephone Co. (PLDT), which saw its shares go up by P5 to P2,520. The share price of SM Investments Corp. also gained P15 to P350, while Metro Pacific Investments Corp. was up by 12 centavos to P2.60. Conglomerate Ayala Corp. likewise added P7.50 to P275, while Metropolitan Bank and Trust Co. increased by a peso to P39. Philippine deposit receipts of ABS-CBN Holdings Corp. bucked the trend, falling by 50 centavos to P27.50, while Ayala units Manila Water Co., Inc. and Ayala Land, Inc. were steady at P15.25 and P10.25. — Norman P. Aquino, GMANews.TV