MANILA, 20 January — The Philippine stock market soared to a four-month high last week as it enjoyed increased foreign interest combined with fundamentally sound basics.
The market had been steadily rising in the past few weeks so that the actual increase in the composite index was only 5.52 percent or an increase of 65.88 points before it closed at 1,257.48 points.
Traders said other economic indicators have likewise brought bullish prospects to Philippine market players: The Peso has been very stable, inflation has remained in check, and another rate cut by the US Federal Reserves at the end of the month should be another factor to consider.
Value turnover thus rose 24.65 percent to 2.6 billion pesos while volume turnover zoomed 131.48 percent to 3.68 billion shares.
"We had the recent bond offering (the government sold $750 million of 15-year global notes last week) which went very successfully and perhaps foreigners are starting to take a look at this market again...it’s been a laggard regional market (since Sept. 11) and they may be thinking it’s a place where they can get good returns," said Vincent Lazatin, vice-president of fund management firm World Wide Investment Management Co. of the Philippines Inc.
With interest rates easing and the peso relatively stable for now, investors were looking at shifting some of their funds out of the fixed income and currency markets and into equities, online brokerage 2TradeAsia.com’s research head Grace Cerdenia said.
"Fixed income yields are becoming unattractive and foreign exchange movement is relatively stable so equities look like the best bet," Cerdenia said.
She added that investors were shrugging off reports of possible destabilization attempts against the government.
"The market has gotten tired of this kind of news." Stockbrokers thought this week would be uneventful as the market started out changing very little because investors seemed reluctant to push the main index above the psychologically-important 1,200 points mark. "I think it was a combination of technical reasons and a lack of new leads... there is no catalyst to push the market beyond 1,200 points right now," AsiaSec Equities analyst Oliver Plana said at the beginning of last trading week.
He added that some positive fourth-quarter numbers for specific firms when full year 2001 earnings results begin to come out late this month could provide the next spur for selected stocks.
