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| By Ian C. Sayson |
| Bloomberg |
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| PHILIPPINE stocks rose to a five-week high on speculation the central bank will not raise rates sharply after borrowing costs fell. Philippine central bank Governor Amando Tetangco said in a statement posted on the regulator's web site that monetary authorities will take steps to lift interest rates that have fallen below the inflation level. The yield of the 91-day Treasury bill, which banks use to price loans, slipped to a record in Monday's auction. "Raising interest rates is a tactical move to flush out excess liquidity in the system," said Jenny Ting, who helps manage about $4.7 billion at BPI Asset Management Inc. "It is not intended to sharply increase borrowing costs. You need a low interest rate environment to pump up the economy." The Philippine Stock Exchange index added 18.40, or 0.6 percent, to 3248 at the close. The measure, which advanced as much as 1 percent earlier Tuesday, closed at its highest since February 27. Philippine Long Distance Telephone, the nation's largest company by market value, gained P40, or 1.6 percent, to P2,565, its highest close since February 26. Ayala Corp., which aims this year to pay debts ahead of schedule to save on P1 billion in interest costs in 2008 and 2009, rose P5, or 0.9 percent, to P570, a 15-day high. The yield of the 91-day Treasury bill fell Monday to 2.86 percent, its first drop since February 19. The central bank's inflation target is 4 percent to 5 percent this year. "THE decline in the yield of the key treasury bill signals that we are still in a low interest rate environment," said Peter Raymond Lee, chief investment officer at Manila-based IGC Securities Inc. "Investors were worried that interest rates will rise sharply because of the previous upticks in the yield before this decline." Filinvest Land Inc., which is starting a record 14 residential projects this year, jumped 6 centavos, or 3.5 percent, to P1.76, a five-week high. SM Prime Holdings Inc., the nation's largest shopping mall operator, gained 25 centavos, or 2.2 percent, to P11.75, a three-week high. SM Development Corp., which is starting three residential projects this year, gained 20 centavos, or 5.2 percent, to P4.05, its biggest advance since February 20. Mega world Corp., one of the nation's two-largest builders of residential and office towers, advanced 5 centavos, or 1.4 percent, to P3.55, after rising Monday to its highest close since December 27, 1996. Strong earnings THE company said earlier Tuesday that net income grew 75 percent to P2.04 billion last year, the highest since 1996 driven by demand for homes and offices. "We have high confidence that Megaworld will hit our profit forecasts for this year and 2008," said Jody Santiago, head of research UBS Securities Philippines Inc. Santiago, who forecasts Megaworld's share price to climb to P3.80 in the next 12 months, said the builder will probably earn P2.8 billion and P3.8 billion in profits this year and 2008. Shares worth P4.45 billion were traded. |
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