By Ian C. Sayson
Reporter
Philippine stocks rose for a second day after the government raised its 2007 economic growth forecast, citing lower interest rates and a stronger peso. Ayala Corp. and Manila Electric Co. gained.
“Faster economic growth could spill over to stronger corporate earnings and translate to higher valuations for stocks,’’ said Erwin Balita, analyst at Manila-based AB Securities Inc.
Bank of the Philippine Islands advanced after the central bank said the industry’s bad loan ratio fell to the lowest in almost nine years. Equitable PCI Bank (EPCIB) and Banco de Oro climbed as the lenders moved a step closer to integrating their operations.
The Philippine Stock Exchange Index gained 26.73, or 0.9 percent, to 3019.06 at the close in Manila, after climbing 1.8 percent on January 12. The measure, which closed at its highest in eight days, advanced earlier today to as much as its highest in almost 10 years.
Gross domestic product will probably increase 6.1 percent to 6.7 percent this year, Finance Secretary Gary Teves told reporters January 12 after trading closed. The government previously predicted growth of 5.7 percent to 6.5 percent.
Ayala Corp., the nation’s third-largest company by market value, rose P15, or 2.6 percent, to 585, a 10-day high. Manila Electric’s Class A shares, equity reserved for Filipinos in the nation’s largest power retailer, added P1, or 1.8 percent, to P58. Its Class B shares, which have no ownership restrictions, gained P1, or 1.7 percent, to P59.
Banks rise
Class A shares of San Miguel Corp., the nation’s largest-food and drinks company, gained 50 centavos, or 0.8 percent, to P64.
Its Class B shares rose P2.50, or 3.3 percent, to P79, its highest since May 23.
The PSE Finance Index, made up of the nation’s 13 biggest banks, insurers and finance companies, rose 2.1 percent to P853.15, its highest since January 3, 2000. The measure posted its biggest gain since August 16 after the central bank said the bad loan ratio of commercial lenders fell in November to 7 percent, the lowest in almost nine years, driven by an 8.1-percent growth in lending.
Bank of the Philippine Islands, the nation’s No. 2 lender, gained P2, or 3 percent, to P69.50, its highest close ever.
Metropolitan Bank & Trust Co., the nation’s largest lender by assets, added P2, or 3.8 percent, to P55, the highest since January 3, 200.
“The rate of loan growth is the best since 2004 on a three-month moving average basis,’’ said Jojo Gonzales, head of research at Philippine Equity Partners in Manila. “If the rate is sustained, it should help banks’ earnings.’’
Banco de Oro
Separately, Banco de Oro rose P1.50, or 3.4 percent, to P46, its biggest gain in three weeks. The lender said that it received central bank approval for its president Nestor Tan to also hold the position of office-in-charge at EPCIB, the nation’s third-largest lender by asset. EPCIB gained 50 centavos, or 0.6 percent, to P80.50.
International Container Terminal Services Inc., the nation’s largest port operator, fell 25 centavos, or 1 percent, to P24.75, after the stock climbed to a record last week on its plan to expand in China.
The stock’s 14-day relative strength index, a ratio made up of changes in its share price in the past two weeks, was at 82 at the start of today’s trading. A figure above 70 signals to some investors that the stock is poised to fall.
Shares worth P1.97 billion were traded, 22-percent less than the six-month daily average. Gainers outnumbered losers 71 to 30, with 61 stocks unchanged in the broader market.
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