THE Philippine stock index on Thursday climbed for the sixth-day, extending a nine-year high. Metropolitan Bank & Trust Co. jumped on speculation earnings would improve from a share sale and disposal of bad loans.
"The bank will finally be able to undertake a long-awaited balance sheet clean-up after its successful equity raising," said Gilbert Lopez, an analyst at the Philippine unit of Macquarie Securities Ltd.
Manila Electric Co. fell after the nation's largest power retailer said third-quarter profit plunged 80 percent from the previous three months.
The Philippine Stock Exchange Index added 4.22, or 0.2 percent, to 2682.94 at the noon close in Manila. The measure, which gained 5.3 percent in the previous five sessions, closed at its highest since August 6, 1997.
Metropolitan Bank, the nation's largest lender by assets, surged P4.50, or 11 percent, to P45.50, its biggest gain since January 2001. The stock resumed trading Thursday, after a voluntary two-week suspension to complete a P6.6-billion ($132 million) share sale.
The lender sold 173.6 million shares in the past two weeks at P38 each. The bank, which needed the additional funds to boost its capital, said Thursday it will sell P8 billion of bad debts Friday, trimming its ratio of nonperforming loans by a third.
"Sentiment towards the stock is likely to turn positive as the profit outlook improves," said Lopez, who raised the stock's rating to 'outperform' from 'neutral.' The stock may rise to P48.50 a share in the next 12 months, he said.
Meralco's Class A shares, which are reserved for Filipinos, fell 50 centavos, or 1.9 percent, to P26.50, its first decline in three sessions. Its Class B shares, which have no ownership restrictions, lost P1, or 3.2 percent, to P30.50, rounding a 7.8 percent, four-day decline.
Megaworld Corp., the nation's largest builder of office and residential condominiums, fell 4 centavos, or 1.8 percent, to P2.18 on speculation the stock's 12-percent gain in the previous four sessions exceeded its earnings prospects. Megaworld is trading at 18 times prospective earnings compared with 15 times for the main stock index.
Shares worth P4.05 billion were traded, almost double the six-month daily average. Losers beat gainers 63 to 42, with 51 stocks unchanged in the broader market. Bloomberg
"The market has gone up too fast, too soon," said Manny Cruz, analyst at Belson Securities Corp. "The sharp rise makes it attractive for investors to take their gains."
Business Mirror
October 28, 2006
http://www.businessmirror.com.ph/comp03.php
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