PSEi closes at new record on foreign, domestic buying

The Philippine Stock Exchange index closed to a new record high Wednesday fueled by domestic liquidity and net foreign buying. The PSE index rose by 25.03 points or 0.6 percent to close at 4,196.73 as of the 12:10 p.m. market information posted by the exchange. A research analyst with DBP-Daiwa Capital Market Philippines Inc. said the PSEi touched an intraday all time high of 4,226.48 before a round of profit-taking shave some of those gains. Over 2.361 billion shares valued at P6.071 billion changed hands. Winners led loser 77 to 63, with 45 issues unchanged. The sentiment is being buoyed on all fronts with the US and most Asian markets also up, said Juanis Barredo, vice president for sales at CitisecOnline.com. There is a lot of foreign buying in the Philippine blue chips because of robust corporate earnings and strong economic growth, Barredo said. “There was some sort of profit-taking toward the end [of Wednesday’s session]," said Daniel Picache, research analyst of DBP-Daiwa Capital . The Philippine market is now operating in an environment of “high liquidity, low inflation, and low interest rates," Picache said. Inflation was at a slow 3.5 percent last month, the National Statistics Office reported Wednesday. Economists expected that the Bangko Sentral ng Pilipinas will keep the record low policy rates of 4 percent for overnight borrowing and 6 percent for overnight lending for the rest of the year. “Under these conditions it is easier to borrow money, and most of that money is being placed in equities right now," Picache said. “Plus, we have net foreign buying [in the stock market] in the last two weeks," he added. He explained that the macroeconomic indicators for the Philippines, and most emerging markets in East Asia, are attracting foreign investors who are putting their money in equities in the region rather than gamble in the US where the threat of a double-dip inflation hangs precariously over the equities market. There are also certain fears about placing money in European bourses where the euro debt crisis is proving to much a risk to take even for the appetite of portfolio investors, Picache added. — VS, GMANews.TV