PHILIPPINE stocks rose in three successive trading days, lifting the index to its highest in almost 10 years after the central bank said remittances from Filipinos working overseas last year were probably higher than initially estimated.
“A lot of investors are returning from the holiday and they are coming back in a big way because of good economic fundamentals,” said Jenny Ting, who helps manage about $4.7 at BPI Asset Management Inc. in Manila.
Ayala Land Inc. and SM Prime Holdings Inc. advanced on optimism the higher than expected remittances will help accelerate economic growth. EEI Corp. climbed to its highest in more than 10 years after the company sold properties to pay debt and raise funds for expansion. Globe Telecom Inc. gained after its share price estimate was raised 38 percent by J.P. Morgan Securities Ltd.
The Philippine Stock Exchange Index gained 51.23, or 1.7 percent, to 3070.29 at the close in Manila, its highest close since April 3, 1997. Tuesday’s gain extends the main stock measure’s advance this year to 2.9 percent.
Filipinos working abroad probably sent home at least $14 last year, Central Bank Deputy Governor Diwa Guinigundo said Tuesday after trading closed. The central bank in November estimated 2006 remittances at $13.4 billion.
Remittances from Filipinos working as nurses, engineers and entertainers overseas make up more than a 10th of the nation’s $98 billion economy. Those funds have helped fuel spending on food, homes and mobile phones in the Philippines.
‘Chief driver’
Ayala Land, the nation’s largest builder, gained P1, or 6.5 percent, to P16.50, its highest since July 2, 1997. SM Prime Holdings, the nation’s largest shopping mall operator, jumped 50 centavos, or 4.4 percent, to P11.75.
The central bank said in a December forecast that remittances this year will reach $14.1 billion. The government last week raised its economic growth forecast for this year to a range of 6.1 percent to 6.7 percent, compared with its previous projection of 5.7 percent to 6.5 percent.
“Overseas remittances continue to be a chief driver of the economy,” said Gilbert Lopez, analyst at Macquarie Securities Ltd. in Manila. “The prime beneficiaries of robust remittances are the property and banking sectors.
Metropolitan Bank & Trust Co., the largest local lender by asset, added P1, or 1.8 percent, to P56, its highest since January 3, 2000. Banco de Oro, which is combining with bigger rival Equitable PCI Bank (EPCIB), gained 50 centavos, or 1.1 percent, to P46.50. EPCIB, the nation’s third-largest lender by asset, rose P1.50, or 1.9 percent, to P82.
EEI jumps
“AFTER looking at the projections, investors have realized that even with the market’s recent gains it is still good to own stocks at these levels,” BPI asset’s Ting said. He expects the main stock index to climb to a range of 3,400 to 3,500 this year. Last year, the measure surged 42 percent, its fourth straight year of gains and the fifth best performer among key stock benchmarks in Asia.
Separately, EEI, the nation’s second-largest construction company by market value, gained 35 centavos, or 9.2 percent, to P4.15, its highest since September 17, 1996. EEI said it raised P1 billion from the sale of its properties in Quezon City in the capital and Bauan, a town in Batangas, a province south of Manila.
“EEI is raising funds so it can get more contracts,” said Astro del Castillo, managing director of First Grade Holdings Inc., a financial management and advisory company in Manila. “This move is a positive development for the company and its shareholders.”
Globe Telecom
HOUSE of Investments, which owns 47 percent of EEI, jumped 16 centavos, or 7.8 percent, to P2.22, its highest since June 8, 1999.
Globe Telecom, the nation’s second-biggest mobile phone company, gained P10, or 0.9 percent, to P1,190, its first advance in nine days. The stock’s share price will probably climb to P1,650 in the next 12 months, compared with an earlier forecast of P1,200, Louie Hilado, a Singapore-based analyst at J.P. Morgan, said.
The company also said Monday after trading closed that it will stem network congestion by raising by a third the daily rate it charges for a service that allows its customers to send unlimited text messages.
Shares worth P4.44 billion were traded, 75-percent more than the six-month daily average and the second-largest this year. Gainers outnumbered losers 71 to 32, with 61 stocks unchanged in the broader market. (Bloomberg)
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