Philippine stocks gain, ending two-day slide

By Ian C. Sayson

Bloomberg

PHILIPPINE stocks climbed, ending a two-day slide, after the yield of a key government treasury bond fell to a record low, making returns from equities more attractive. Ayala Corp. and Bank of the Philippine Islands (BPI) also rose on speculation the decline in the yield of the 91-day Treasury bill will help keep interest rates low, spurring demand for mortgages and loans. Philippine Long Distance Telephone Co. (PLDT) advanced after a unit said it will expand its outsourced business services. “Funds are shifting into equities because returns from fixed-income assets are becoming unattractive,” said Jenny Ting, who helps manage about $4.7 billion at BPI Asset Management Inc. in Manila. “Low interest rates also lead to more economic activities because it would encourage consumers and companies to borrow for spending and expansion.” The Philippine Stock Exchange composite index gained 46.28, or 1.4 percent, to 3375.31 at the close, ending a two-day, 1.5-percent slide that pulled it off a more than 10-year high. The main stock measure is less than 100 points away from its record 3447.60 reached on February 3, 1997. The measure has advanced 13 percent this year, Asia’s fifth-biggest gainer after benchmarks in Vietnam, China, Pakistan and Malaysia. Ayala Corp., owner of the nation’s largest property builder, added P10, or 1.6 percent, to P635. Bank of the Philippine Islands, the nation’s most profitable lender, gained 50 centavos, or 0.7 percent, to P70. The yield of the Philippine benchmark Treasury bill, which lenders use to price loans, fell to a record low at a regular auction Monday, declining to 2.885 percent from 3.008 percent at the February 5 sale. The yields on the 182-day bill and the 364- day bill also fell to record.   Property shares gain “LOWER interest rates are positive for the market overall,” said Tanya Cua, analyst at Macquarie Securities Ltd.’s Manila-unit. “The best way to play this is through the property sector.” Ayala Land Inc., the nation’s largest property developer, gained 25 centavos, or 1.5 percent, to P17, bringing this year’s rise to 12 percent. Megaworld Corp., a builder of residential and office towers, rose 15 centavos, or 4.7 percent, to P3.35, its highest since February 20, 1997. Belle Corp., which is building a resort south of Manila, added 12 centavos, or 8.5 percent, to P1.54, its highest since March 16, 2005. BPI Asset’s Ting also said that the stronger peso is encouraging investors to put more money into the Philippines as the appreciating currency provides an additional gain from stocks. Peso advances “UNLIKE before, when a depreciating peso eroded part of their gains, the strong currency will help preserve or even add to the returns of overseas funds invested in the Philippines,” Ting said. The peso has gained 2-percent against the US dollar this year, sending the local currency to its strongest since March 2001. Metropolitan Bank & Trust Co., the nation’s largest lender by assets, added P1, or 1.5 percent, to P67.50, snapping a two-day, slide. Among other gainers, Universal Robina Corp., the nation’s largest snack-food maker, added 25 centavos, or 1.3 percent, to P20, following a six-day, 18-percent gain partly due to expectations its dividend payments could double this year. Separately, PLDT, the nation’s largest phone company, advanced P10, or 0.4 percent, to P2595, following a two-day, 1.3-percent slump. The company’s unit, SPi, said Tuesday that it will spend P5 billion to expand its operations of providing outsourced business services, including call centers. Shares worth P4.15 billion were traded, 27-percent more than the six-month daily average. Gainers beat losers 107 to 31, with 42 stocks unchanged in the broader market.

 

http://www.businessmirror.com.ph/02212007/companies02.html