By Ian C. Sayson
Bloomberg
PHILIPPINE stocks rose for the fifth successive trading day Wednesday and continued to lift the index at its highest in almost a decade. Speculations by market players remain strong that record-low bond yields will boost demand for shares.
“The drop in bond yields and a low interest-rate environment will spur people to go to equities,” said Rico Gomez, who helps manage about $1 billion at Rizal Commercial Banking Corp. “Low fixed-income returns will make dividend-paying stocks look very attractive.”
Ayala Land Inc. and Bank of the Philippine Islands gained on speculation lower interest rates will spur demand for homes and loans. The value of shares traded is the highest in six weeks.
The Philippine Stock Exchange Index added 45.41, or 1.4 percent, to 3244.75 at the close, extending a four-day, 5.2-percent advance. It hasn’t closed higher since March 13, 1997. The measure fell as much as 0.3 percent earlier Wednesday.
Philippine Long Distance Telephone Co.(PLDT), the nation’s largest company by market value, added P20, or 0.7 percent, to a record P2740. Ayala Corp., the nation’s third-largest company by market value, added P20 or 3.3 percent, to P620, its highest ever.
Ayala’s dividend payment has grown 26 percent in five years. The shares are among the 22 stocks Wednesday that climbed to at least their 52-week highs.
“With returns from fixed income declining, investors are more and more choosing stocks that are good in paying dividends,” Gomez said.
‘Good’ for Mortgages
THE yield on the 91-day Treasury bill, which banks use as a benchmark for loan rates, dropped to a record 3.171 percent at a government auction this week. The yields of the 182-day bill and the 364-day bill also fell to records.
Class A shares of Manila Electric Co., equity reserved for Filipinos in the nation’s largest power retailer, surged P3, or 4.5 percent, to P69.50, to the highest close since February 23, 2000. Its Class B shares, which have no ownership restrictions, advanced P3.50, or 5.2 percent, to P71.50, bringing this year’s advance to 30 percent.
Meralco, as the power retailer is known, next month will pay its first dividend in seven years. The company will pay P1.01 billion or P1 a share in dividends.
Aboitiz Equity Ventures Inc., which has investments in power, banking and transportation, climbed 40 centavos, or 4.4 percent, to a record P9.60, extending this year’s gain to 37 percent. Aboitiz is set to pay its biggest ever dividend, 20 centavos a share, on February 23.
Ayala Land, the nation’s biggest developer, gained 25 centavos, or 1.5 percent, to P16.75, after climbing as much as 6.1 percent. Bank of the Philippine Islands, the most profitable lender, climbed P1, or 1.4 percent, to P71.50, its highest ever.
“Low interest rates will be good for home purchases and demand for loans,” said Mark Canizares, an analyst with CitisecOnline in Manila.
Metropolitan Bank & Trust Co., the nation’s largest lender by assets, added P1, or 1.7 percent, to P60, bringing this year’s gain to 17 percent. Robinsons Land Corp., a builder of residential towers, gained 25 centavos, or 1.7 percent, to P15.25, its first climb in six days.
Megaworld Corp., the nation’s largest builder of residential and office condominiums, surged 12 centavos, or 5.1 percent, to P2.46, its biggest gain since December 12.
Megaworld’s share price may advance to P2.90 a share in the next 12 months, compared with a previous P2.20 forecast, on expectation that it will offer 25-year financing for all its residential projects, CitisecOnline said in a note Wednesday.
Shares worth P6.24 billion were traded, more than double the six-month daily average and the biggest since December 13. Gainers outnumbered losers 67 to 49, with 49 stocks unchanged. The measure fell as much as 0.3 percent earlier Wednesday.
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