Financial markets roll into record territory
Philstar
27 November 2012
MANILA, Philippines - Local financial markets rolled into record
territory yesterday, as a generally upbeat investor sentiment pushed the peso
and the stock index to new highs, and Treasury bill rates to historic
lows.
Analysts attributed the strong performance to renewed confidence on developed nations solving their debt problems, as well as optimism in the strength of the local economy.
At the Philippine Stock Exchange, the benchmark PSEi closed 27.08 points or 0.5 percent higher yesterday at 5,579.42 – a new all-time high.
Considered an immediate gauge of investor confidence, the 30-company PSEi has hit record highs a total of 29 times so far this year.
Trading, however, was mixed as advancing stocks almost equaled decliners, 77 to 76, while 51 other issues were unchanged.
Market players had anticipated a pullback in the PSEi this holiday-shortened week following a torrid performance the past week, with the index reaching peak three times.
This as local equities, along with other stock markets in Asia, continue to cheer on positive economic data in the US, offsetting concerns about Greece’s financial crisis.
Asian stock markets posted slight gains yesterday after the unofficial start of the holiday shopping season in the US topped expectations.
The peso, on the other hand, broke to a fresh 56-month high of 41 to a dollar – its strongest close against the greenback since hitting 40.85 on March 7, 2008. It was also firmer than the 41.05 posted last Friday.
Funds also went to government bonds. At the auction yesterday, yield of the 364-day Treasury bill (T-bill) hit a record low 0.549 percent. The government awarded P4 billion as planned.
“There was positive sentiment in the global markets bolstered by confidence in the improving US economy. There was some good data coming from the US,” Astro del Castillo, managing director at First Grade Finance Inc., said in a phone interview.
Stores in the US have reopened following the Thanksgiving holiday and analysts are forecasting good consumer spending on “Black Friday,” usually the busiest shopping day for the year in the world’s biggest economy.
Surveys showed a record 247 million shoppers visited stores and websites between Thursday and Sunday, up 9.2 percent from the year before.
This bodes well for the country, which has been hit by slowing growth partly because of its huge debt and budget deficit, four years after the worst financial downturn since the Great Depression in the 1930s.
In addition, Del Castillo said there was also optimism on the outcome of the euro zone finance ministers meeting which will happen tonight, Philippine time.
Finance ministers from the countries that use the euro currency will meet to try to reach an agreement for Greece to receive the next installment of its emergency bailout loan. Athens needs the money to avoid bankruptcy.
A trader at a local bank agreed, noting that investors are positive the 17-nation bloc will come into an agreement to give Greece, its debt-ridden member, the second tranche of its bailout approved last May.
“In general, other currencies in the region also gained today due to risk-on sentiment,” a trader at a local bank said in a phone interview.
“There was also confidence on talks to deal with the US ‘fiscal cliff,’” he added, pertaining to negotiations among US legislators on how to avoid huge spending cuts and higher taxes which will kick in by yearend.
Investors have also been focused on whether the White House can come to a deal with Congress to avoid automatic tax increases and spending cuts at the start of next year. Investors remain confident that their worst fears — a US recession and a Greek exit from the euro — will be averted.
“Talks have halted due to the holiday but the market is optimistic because of the constructive description (on the talks) mentioned days ago,” the trader explained.
For her part, National Treasurer Rosalia de Leon pointed to “still manageable inflation outlook” for the lower rates fetched at the auction. Inflation as of October is at 3.2 percent, within the government’s official three- to fi five-percent target – fi ve-percent target. with AP - By Prinz P. Magtulis (Philstar News Service, www.philstar.com)
Analysts attributed the strong performance to renewed confidence on developed nations solving their debt problems, as well as optimism in the strength of the local economy.
At the Philippine Stock Exchange, the benchmark PSEi closed 27.08 points or 0.5 percent higher yesterday at 5,579.42 – a new all-time high.
Considered an immediate gauge of investor confidence, the 30-company PSEi has hit record highs a total of 29 times so far this year.
Trading, however, was mixed as advancing stocks almost equaled decliners, 77 to 76, while 51 other issues were unchanged.
Market players had anticipated a pullback in the PSEi this holiday-shortened week following a torrid performance the past week, with the index reaching peak three times.
This as local equities, along with other stock markets in Asia, continue to cheer on positive economic data in the US, offsetting concerns about Greece’s financial crisis.
Asian stock markets posted slight gains yesterday after the unofficial start of the holiday shopping season in the US topped expectations.
The peso, on the other hand, broke to a fresh 56-month high of 41 to a dollar – its strongest close against the greenback since hitting 40.85 on March 7, 2008. It was also firmer than the 41.05 posted last Friday.
Funds also went to government bonds. At the auction yesterday, yield of the 364-day Treasury bill (T-bill) hit a record low 0.549 percent. The government awarded P4 billion as planned.
“There was positive sentiment in the global markets bolstered by confidence in the improving US economy. There was some good data coming from the US,” Astro del Castillo, managing director at First Grade Finance Inc., said in a phone interview.
Stores in the US have reopened following the Thanksgiving holiday and analysts are forecasting good consumer spending on “Black Friday,” usually the busiest shopping day for the year in the world’s biggest economy.
Surveys showed a record 247 million shoppers visited stores and websites between Thursday and Sunday, up 9.2 percent from the year before.
This bodes well for the country, which has been hit by slowing growth partly because of its huge debt and budget deficit, four years after the worst financial downturn since the Great Depression in the 1930s.
In addition, Del Castillo said there was also optimism on the outcome of the euro zone finance ministers meeting which will happen tonight, Philippine time.
Finance ministers from the countries that use the euro currency will meet to try to reach an agreement for Greece to receive the next installment of its emergency bailout loan. Athens needs the money to avoid bankruptcy.
A trader at a local bank agreed, noting that investors are positive the 17-nation bloc will come into an agreement to give Greece, its debt-ridden member, the second tranche of its bailout approved last May.
“In general, other currencies in the region also gained today due to risk-on sentiment,” a trader at a local bank said in a phone interview.
“There was also confidence on talks to deal with the US ‘fiscal cliff,’” he added, pertaining to negotiations among US legislators on how to avoid huge spending cuts and higher taxes which will kick in by yearend.
Investors have also been focused on whether the White House can come to a deal with Congress to avoid automatic tax increases and spending cuts at the start of next year. Investors remain confident that their worst fears — a US recession and a Greek exit from the euro — will be averted.
“Talks have halted due to the holiday but the market is optimistic because of the constructive description (on the talks) mentioned days ago,” the trader explained.
For her part, National Treasurer Rosalia de Leon pointed to “still manageable inflation outlook” for the lower rates fetched at the auction. Inflation as of October is at 3.2 percent, within the government’s official three- to fi five-percent target – fi ve-percent target. with AP - By Prinz P. Magtulis (Philstar News Service, www.philstar.com)
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