MANILA, 17 February — The Philippine market broke records as it neared the end of last week by climbing on the strength of new interest rate cuts and the prospect of an improved economic situation.

The stock market closed at its highest level in over seven-and-a-half months, breaking the 1,400-point barrier as investors welcomed another interest rate cut by the Bangko Sentral ng Pilipinas (BSP), traders said.

The composite index surged forward 72.38 points or 5.38 percent to 1,416.83 points. Total value turnover also rose 8.82 percent or P3.04 billion ($59.37 million) while volume turnover increased to 6.46 billion shares representing a rise of 50.46 percent.

All this was further aided by upbeat comments from the government about its economic targets, traders said. Stockmarket denizens that the closing last week of 1,416.83 points was the highest closing level since ending at 1,410.07 points on June 29 last year.

“I think everybody was expecting the central bank to announce a rate cut last week and that has been positive for the market, pretty much across the board,” United Coconut Planters Bank trust fund manager Vanessa Lim said.

Government remarks on Wednesday that it may set more ambitious economic targets for 2002 because of signs of a quicker-than-expected recovery also underpinned the market gains.

Aside from the positive impact of the rate cut, market players also cheered two decisions of the Philippine Stock Exchange (PSE) board of governors during their own regular meeting last Wednesday.

The PSE board voted to extend the trading hours on the floor to move to perk up the market by attracting more volume and aligning its movement with the rest of the regional bourses.

Tentatively scheduled to start on Feb. 18, the daily trading activities will extend for another one-and-a-half hours from 1:00 p.m. to 2:30 p.m. daily, following the usual 9:30 a.m. to 12:00 schedule.

DBS Vickers Ballas associate sales director Eric Santa Ana said many local investors appeared to be taking advantage of the market’s ongoing strength as well as the absence of many foreign players for the Lunar New Year holiday to come in.

“The upbeat mood has carried over into the New Year, buying flows have been up since January,” he said, adding however that many of the players appear to be short term and for the market to sustain its upside, further fresh funds would be needed.

“The market is dominated by punters, short term investors...we need new funds in to continue the upward momentum,” Santa Ana said.

By sectoral indices, the property counter moved higher along with the commercial-industrial and financial services groups.

The mining and oil sectors, on the other hand, moved down as investors focused on the more upbeat counters.