RP stocks climb to 2-mo. high on US co. earnings

By Ian C. Sayson

Bloomberg

Philippine stocks gained, lifting the index to a two-month high, on speculation better-than-expected earnings in the US will boost economic growth in the Southeast Asian economy. Ayala Corp. and Metropolitan Bank & Trust Co. rose. “Investors are very bullish because of the encouraging developments in the US,” said Olan Caperina, who helps oversee about $4.7 billion at BPI Asset Management Inc. in Manila. SM Investments Corp. had its biggest gain in a month after the company said it will pay higher dividends this year and it will spend P95 billion on a five-year expansion project. Aboitiz Equity Ventures Inc. advanced after the company said its power unit’s initial share sale will raise P8.4 billion ($177 million). The Philippine Stock Exchange index jumped 40.91, or 1.2 percent, to 3350.34 at the close in Manila, after climbing 0.5 percent Wednesday. The measure closed at its highest since February 26. “Earnings are exceeding expectations in the US and that reduces the concerns of a recession in the US economy,” Caperina said. “Sentiments are very upbeat.” The US is the biggest overseas market for Philippine products and also the largest source of money transfers, which accounts for  more than a 10th of the Southeast Asian economy.  ‘Bull run’ AYALA, the nation’s fourth-largest company by market value, rose P25, or 4.2 percent, to P625, heading its highest since February 26, before a global sell-off in equities. Metrobank, the nation’s largest lender by assets, gained P1, or 1.6 percent, to P63.50. The 33-member main stock measure is less than 40 points away from a 10-year high, a level it reached on February 23 before a global sell-off in equities the following week. The measure is up 12 percent this year, more than double the 5.4 percent increase in the Morgan Stanley Capital International Asia-Pacific Index. The Philippine Stock Exchange index has risen in each of the last four years, almost tripling its value from the end of 2002. “We have been in a bull run since 2003,” said Francisco Liboro, president and strategist at Manila-based PCCI Securities Brokers Corp. “There is still room for more upside.” Liboro forecast the index to reach 3,700 this year. SM Prime Holdings Inc., the nation’s largest shopping mall operator, gained 25 centavos, or 2.1 percent, to P12, extending this year’s climb to 12 percent.  Share sale Manila Electric Co.’s Class A shares, equity reserved for Filipinos, rose P2, or 2.9 percent, to P70.50, its biggest gain in more than a month. Its Class B shares, which have no ownership restrictions, added P2, or 2.9 percent to P71, its highest in a month. SM Investments, the holding company of Henry Sy, the nation’s richest businessman, jumped P12.50, or 3.6 percent, to P365, its biggest gain since March 22. The company said Wednesday that it will buy more land, build malls and homes, and expand its bank units in the next five years. It also said that it will pay P3.2 billion and distribute 25 million shares as dividends this year. Aboitiz Equity, which has investments in banks and water transportation, jumped 20 centavos, or 2.2 percent, to P9.20, its highest since January 24. The company plans to sell 1.8 billion shares, or 25 percent, of Aboitiz Power Corp. to raise funds for expansion. The estimated proceeds from the share sale value Aboitiz Power at P33.6 billion, compared with Aboitiz Equity’s P52.39-billion market capitalization. Separately, Union Bank of the Philippines, a unit of Aboitiz Equity, has raised $100 million from a share sale to boost its capital, Macquarie Bank Ltd., which arranged the sale, said Wednesday. See Union Bank,B1. Unionbank is suspended from trading to complete the domestic sale of 4.5 million shares. Shares worth P4 billion were traded, 18 percent less than the three-month daily average. Gainers beat losers by more than three to one in the broader market. Megaworld Corp. (MEG PM), one of the nation’s two biggest builders of residential and office towers, gained 10 centavos, or 2.9 percent, to P3.50, ending a two-day, 4.2 percent slump. The builder said Wednesday it expects P450 million in annual rental income from the office and commercial developments in its McKinley project. It also forecast that reservation sales for all its projects will reach P15 billion this year, boosting its 2007 earnings outlook. International Container Terminal Services Inc. (ICT PM), the largest Philippine port operator, climbed 50 centavos, or 1.8 percent, to P28.50. The government’s decision to cut wharfage fees by 90 percent to help exporters cope with a stronger peso will have “negligible” impact on earnings, the company said Wednesday after trading closed. Petron Corp. (PCOR PM), the nation’s biggest oil refiner, jumped 30 centavos, or 5.8 percent, to P5.50, its biggest gain in two weeks. The company said sales volume of gasoline, which make up 90 percent of revenue, may have risen up to 2 percent in the first quarter.

 

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