PSEi surges 1.79% to new record on foreign funds

Net foreign buying on the Philippine Stock Exchange totaled P2.133 billion Monday, driving the main index to closed at all time high of 3,972.60 on a value turnover of P8.05 billion, another record feat that broke the previous record transaction value of P7.02 billion on Sept. 3. The PSE said in its daily quotation report that foreign buying totaled P4.459 billion during Monday’s session, while foreign selling amounted to P2.362 billion, which showed that total foreign transactions amounted to P6.821 billion or 85 percent of the market total value turnover. “The PSEi continued to hit new highs on the back of investor confidence in the Philippines," PSE president and CEO Val Antonio Suarez said in a statement after the market closed. Suarez said there have been several initiatives to “broaden the market’s breadth and depth," including the introduction of new investment products and the successful transition to the new trading system in July. Bangko Sentral ng Pilipinas Gov. Amando Tetangco Jr. over the weekend said the stock market has been on the uptrend “because of foreign funds coming in." He noted that in the first eight months of the year foreign portfolio investment, also referred to as "hot money," amounted to $883.4 million. The PSEi surged to a new record high for the second successive trading day Monday, fueled also by expectations of strong corporate earnings for the second half of the year. “Investors are [considering] the better earnings reports for the second half, plus the positive tone from August figures," said Alex Pomento, equity research head of Macquarie Group Ltd. Market expectations are feeding on the macro figures in the second quarter that government released last month, showing that the economy – measured by the gross domestic product – grew by 7.9 percent in the April-June period and by 7.3 percent in Jan.-March, according to traders and analysts. The PSEi closed at 3,972.60, up by 69.86 points or 1.79-percent from Thursday’s close. The market was closed for a holiday on Friday. More than 2.403 billion shares valued at P8.05 billion were traded. Winners led losers 102 to 47, while 35 issues remained unchanged. There is “bullish domestic economic outlook," traders said. The urge is to cash in on gains, but the correction "would only be mild," Pomento said. Still, "The market has been very bullish…" the likelihood is quite slim that the index will pull back in the next few days, according to an analyst of First Metro Securities Brokerage Corp. The “index only needs several points to hit 4,000 points," and that level will likely be breached, he added. —JE/VS, GMANews.TV