RP stocks rebound from slump

By Ian C. Sayson

Bloomberg

PHILIPPINE stocks rose, rebounding from a two-month low, after the central bank said money transfers from Filipinos working overseas will climb to a record this year. Ayala Land Inc., which makes 45 percent of its home sales to Filipinos working overseas, and Bank of the Philippine Islands (BPI) gained on speculation rising remittances will boost consumer spending and economic growth. "This is a reassurance that the economy will remain liquid," said Marvin Fausto, who helps manage $3.5 billion in assets at Equitable PCIBank. "It reduces the risk that interest rates will go up and gives support to the stock market." Philippine Long Distance Telephone Co. (PLDT) rose after it increased its dividend payout ratio. International Container Terminal Services Inc. advanced after shareholders approved its merger with a unit. The Philippine Stock Exchange Index jumped 89.99, or 3 percent, to 3063.26 at the close, after sliding 12 percent over the previous seven days during a global equity selloff. The measure fell Tuesday to its lowest since January 11. Only 14 of 153 stocks fell Wednesday in the broader market. Ayala Land rose 75 centavos, or 4.9 percent, to P16. BPI, which forecasts a 20 percent growth in its remittance business annually in the next three years, added P2, or 3.2 percent, to P65, its first gain in four days. Remittances from Filipinos working overseas may rise 5 percent to a record $14.7 billion this year, Philippine central bank Governor Amando Tetangco said Tuesday at the close of trading. The inflows make up about 12 percent of the $117-billion Philippine economy.   'Chief driver' "REMITTANCES continue to be a chief driver of the economy," said Nadine Javellana, an analyst at the Manila-unit of Macquarie Securities Ltd. "The prime beneficiaries of robust overseas remittances would be the property and banking sectors." SM Prime Holdings Inc., the nation's largest builder and operator of shopping malls, added 50 centavos, or 4.6 percent, to P11.50. Universal Robina Corp., the nation's largest snacks-maker, gained 25 centavos, or 1.4 percent, to P18. Megaworld Corp., which sources at least a quarter of its home sales to overseas Filipinos and their families, gained 15 centavos, or 5.7 percent, to P2.80, after a 21-percent loss in the past six days. Metropolitan Bank & Trust Co., which is adding branches in California and Macau to expand its remittance business, rose P3, or 5.4 percent, to P59, its first gain in four days.   Share-price weakness PLDT, the nation's largest phone company, jumped P25, or 1.1 percent, to P2370, snapping a three-day, 3.1 percent decline. "The weakness in the share price is an excellent opportunity," said Ramakrishna Maruvada, Singapore-based analyst at Macquarie Securities and who reiterated his 'outperform' rating on the stock in a note to clients Thursday. "Our investment thesis on the stock is centered on a buoyant macro environment, cheap valuations and strong free cashflow generation." Stocks plunged worldwide last week after a tumble in Chinese equities and disappointing reports on the US economy rattled investor confidence.   Higher dividends PLDT said at the close of trading Tuesday that it will pay 70 percent of its profit in dividends, up from 60 percent previously. The company said that it plans to pay some of its dollar debt before its due to take advantage of the stronger peso. International Container rose P1, or 3.7 percent, to P28, following a three-day, 10 percent slump. The company's shareholders approved Wednesday a merger with ICTSI Manila Holdings Inc. and the reduction of International Container's authorized capital stock by 332.6 million shares. Shares worth P5.56 billion were traded, 51 percent more than the six-month daily average.

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