PSEi posts best month since January 2005

Banking, property ISSUES lead stock market’s climb

THE Philippine stock index gained on Monday, rounding off its best monthly performance in 18 months, after a US economic report added to speculation the Federal Reserve may soon end a two-year run of interest-rate increases.

Stocks were also boosted by a Bangko Sentral ng Pilipinas (BSP) forecast that inflation this month would probably fall below the six-month average of 7.1 percent, raising expectations that the bank would keep its key policy rate unchanged in August for a 10th straight time.

The Philippine Stock Exchange Index added 61.27, or 2.6 percent, to 2390.84 at the noon close in Manila. Stocks advanced 212.05, or 9.7 percent, in July, the biggest monthly gain since January 2005.

Shares worth P1.8-billion traded Monday. Gainers beat losers 72 to 24, with 46 stocks unchanged in the broader market.

“The end of a Fed tightening cycle increases the risk appetite of investors, improving investment flow to emerging markets like the Philippines,’’ said Allan Yu, who helps manage $2.8 billion at Metropolitan Bank & Trust Co.

US domestic product expanded at a 2.5-percent annual pace last quarter, according to the Commerce Department, less than half the 5.6- percent rate in the first three months of the year.

Ayala Corp. rose P12.50, or 3 percent, to P425. Ayala Land Inc. gained 50 centavos, or 3.8 percent, to P13.75 while Bank of the Philippine Islands (BPI) added P1, or 1.9 percent, to P54. BPI reported on July 28 after the market closed that first half profit rose 7 percent to P4.6 billion pesos from P4.3 billion a year earlier.

“Good fiscal numbers and expectations of a robust economic growth” are helping boost stocks said Yu. “Inflation is moderating and that puts less pressure on the Philippine central bank to raise rates.’’

The BSP said July 28 after the market closed that this month’s inflation rate would probably range between 6.3 percent and 7 percent. Slowing inflation gives the BSP more room to hold borrowing costs down, encouraging consumers to lake out bank loans.

Equitable PCI Bank rose the most in more than two years, surging P9, or 11.5 percent, to P87.50, its biggest gain since January 14, 2004.

Metropolitan Bank & Trust Co. said first-half profit rose 35 percent to P3.04 billion on trading gains and fees from remittances and other services. Metrobank shares advanced 50 centavos, or 1.3 percent, to P39.

Shares of Megaworld Corp. rose 4 centavos, or 2.8 percent, to P1.48 after the company on Monday said it raised $100 million from the sale of five-year bonds on July 28.---Bloomberg