Philippine stocks on Monday had their best day in four weeks on expectations inflation will ease further after oil prices fell.
“The Philippines relies on overseas supplies for its crude requirements,” said Fitz Aclan, who helps manage $2.1 billion at the trust department of Banco de Oro. “Lower oil prices support the outlook that inflation will fall.”
The Philippine Stock Exchange Index added 41.66, or 1.8 percent, to 2,371.10 at the noon close in Manila, the highest since August 7. Monday’s gain, the biggest since August 3, follows a 1.4-percent, two-day climb that started August 31, when the government said the economy had its fastest quarterly expansion in a year.
Crude oil for October delivery fell 1.5 percent to $69.19 a barrel on September 1, the lowest close since June 20. The contract last traded at $69.40 at 1 p.m. in Singapore. Lower oil costs may help ease consumer prices in the Philippines, which buys over 90 percent of its oil overseas.
Manila Electric Co., the nation’s largest power retailer, gained on speculation the regulator will allow it to raise distribution fees after the utility asked for a 30-percent increase.
Meralco’s Class A shares, which are reserved for Filipinos, added P1.25, or 7.4 percent, to P18.25, their biggest gain since April 4. Its Class B shares, which have no ownership restrictions, gained P1.50, or 5.5 percent, to P29, its biggest gain since May 8.
Meralco, in an application with the energy regulator, is seeking approval to raise distribution charges to as much as P1.4579 a kilowatt-hour in the 12 months starting July 1, 2007 from about P1.12 a kWh. The company has also asked for increases in each of the three successive years.
“The application boosted sentiment for Meralco’s shares” and those of companies related to the utility, said Rico Gomez, who helps manage about $1 billion at Rizal Commercial Banking Corp. (RCBC).
First Philippine Holdings Corp., which with its partner Union Fenosa SA controls Meralco, rose P2.50, or 5.7 percent, to P46.50, its highest close since July 28.
Benpres Holdings Corp, which owns First Holdings, advanced 8 centavos, or 7 percent, to P1.22, its highest close since May 16. The stock gained 5.6 percent on September 1, when Meralco announced its application for a rate increase.
Ayala Land, the nation’s largest builder, rose 75 centavos, or 5.6 percent, to P14.25, its highest close since May 17.
Philippine Long Distance Telephone Co., the nation’s largest phone company, jumped P35, or 1.8 percent, to P1,960, extending a three-day climb to 2.9 percent.
Baguio Gold Holdings Corp., a company owned by the country’s richest man Lucio Tan, advanced 45 centavos, or 11 percent, to P4.50 on speculation its prospects would improve from its purchase of Philippine Airlines Inc. (PAL). The stock jumped 50 percent on September 1, after the company said it would pay P136 million for six companies that own 81.57 percent of PAL, the nation’s largest carrier.
Bangko Sentral ng Pilipinas Governor Amando Tetangco said on August 29 that inflation probably eased for the fifth month in August on higher food production and easing oil costs.
“The market has been looking for a trigger to push share prices higher,” said RCBC’s Gomez. “Low inflation and good economic growth” support a positive outlook for stocks.
Shares worth P2.85 billion ($56.4 million) were traded, 62-percent more than the six-month daily average and the third time in a week that trading topped P2 billion. Gainers beat losers 76 to 32, with 46 stocks unchanged.
---Bloomberg
Business Mirror
September 6, 2006
http://www.businessmirror.com.ph/comp02.php
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