By Ian C. Sayson
Bloomberg
THE Philippine stock index advanced for a fourth day Tuesday, rounding off the longest winning streak in more than two months. Winning shares gained on speculation that borrowing costs will fall after bond yields fell to record lows.
“Interest cost savings from the decline in rates will help boost corporate margins,” said Jenny Ting, who helps manage about $4.7 billion at BPI Asset Management Inc. “Consumers may be encouraged to spend more and buy homes.”
Philippine Long Distance Telephone Co. (PLDT), the nation’s largest company by market value, advanced to a record for the second day after unit PhilWeb Corp.’s sports betting contract with Singapore’s RealTime Gaming (Asia) Ltd. was approved by the Philippine government.
The Philippine Stock Exchange index added 58.06, or 1.9 percent, to close at 3,199.34, its highest since March 31, 1997. The measure, a basket of 33 stocks, last posted four consecutive gains in the period ended November 3.
Ayala, owner of the nation’s biggest property developer, its most profitable lender and No. 2 mobile phone company, gained P5, or 0.8 percent, to P600. SM Prime Holdings Inc., the nation’s largest shopping mall operator, rose 50 centavos, or 4.4 percent, to P12.
The yield on the 91-day T-bill, which banks use as a benchmark for loan rates, dropped to a record 3.171 percent Monday at the government’s second auction of the securities this year. The yields of 182-day and 364-day T-bills also fell.
Lower Rates
“LOWER rates are positive for the market overall,” said Gilbert Lopez, an analyst at the Manila unit of Macquarie Securities. “The continued drop in Treasury bill rates comes on the back of the government’s improving fiscal position, the slowdown in inflation and stronger economic fundamentals.”
Metropolitan Bank & Trust Co., which is offering 25-year loans for home purchases, climbed 50 centavos, or 0.9 percent, to P59, its highest since October 20, 1999. Security Bank Corp., a rival lender that’s offering 25-year mortgages, jumped P4, or 5.7 percent, to P74, its biggest gain since October 25.
SM Investments Corp., which owns the nation’s largest department stores and groceries, gained P5, or 1.4 percent, to P352.50, after climbing 3.7 percent Monday. The stock paid 34 percent more in dividends last year.
“Investors are buying those shares that still provide value either through dividends or potential price appreciation, even after the market’s recent gains,” Ting said.
Dividends
CLASS A shares of Manila Electric Co., equity reserved for Filipinos in the nation’s largest power retailer, gained 50 centavos, or 0.8 percent, to P66.50, its highest close since February 24, 2000. Its Class B shares, which have no ownership restrictions, rose P1, or 1.5 percent, to P60 pesos, bringing this year’s advance to 24 percent. Meralco, as the power retailer is known, will pay next month its first dividend in seven years while SM Investments will probably pay a higher dividend this year after increasing its payout by 34 percent in 2006.
PLDT, the nation’s largest phone company, surged P120, or 4.6 percent, to P2,720, after an 8.1-percent, three-day climb that lifted it to a record Monday.
PhilWeb, 26-percent owned by PLDT, said the contract allows it and RealTime Gaming to run betting operations in the Philippines for all North American sports, including basketball and golf.
PhilWeb, also an Internet service provider, gained 0.1 centavo, or 2.9 percent, to 3.5 centavos, after gaining as much as 8.8 percent in earlier trading.
Petron Corp., the nation’s largest oil company, advanced 5 centavos, or 1.2 percent, to P4.20. Royal Dutch Shell Plc, Europe’s second-largest oil company and Petron’s biggest rival, canceled a proposal to expand a refinery in the Philippines because of high construction costs, the spokesman for the local unit of Shell said Monday after trading closed.
Shares worth P3.84 billion were traded, 44 percent more than the six-month daily average. Losers beat gainers 64 to 53, with 54 stocks unchanged in the broader market.
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