...the PH stock market all-time high (again?!)

New high: PSEi surges past 7,100 level

 

ABS-CBNnews.com

04/22/2013

 

 

Traders flashed the “Upgraded to 7,000” on the trading floor.
Photo courtesy of Philippine Stock Exchange

MANILA, Philippines - Barely four months after it first breached the 6,000 level, the Philippine Stock Exchange index (PSEi) surged past 7,100 on Monday.

Driven by optimism on corporate earnings and anticipation of another special deposit account rate cut, the benchmark index closed at a new record 7,120.48, up 2.35% or 163 points. This is the benchmark index's 27th record high this year.

The PSEi made history early Monday, as it passed the 7,000 mark for the first time. At 9:52 a.m., the PSEi hit 7,009.13, up 0.75% or 52 points, as traders on the floor cheered.

In an interview on ANC, PJ Garcia, senior vice president at BPI Asset Management, admitted he was surprised the market breached the 7,000 level this fast.

"I'm really surprised by the resilience and strength of the market. On the other hand, we're also expecting this. It just happened sooner than we were expecting it to hit 7,000. The market is getting a bit ahead of itself, in terms of price, it has gone up ahead of earnings... I think they're anticipating more earnings surprises at least for the banking sector," he said.

Among the day's gainers were Sy-led companies, BDO Unibank (up 2.6% to P92.65) and SM Investments (up 2.22% to P1,150). Last week, BDO surprised the market with its very strong first quarter profits - P10 billion. The Sy-led bank said it expects to hit a record P20.4 billion this year.
Also ending the day higher were Ayala-led companies Ayala Corp. (up 5.44% to P640) and Ayala Land (up 2.53% to P32.45).

Stocks may also be up as investors anticipate another cut in the interest rate of SDAs. Lower interest rates may prompt some people who have parked their money in the Bangko Sentral's SDAs to shift that cash to stocks.

"Definitely, we've seen very good shifts from SDA, cash or bonds to equities over the last couple of months given the BSP has reduced SDA rates," Garcia said.

"The market is already discounting that right now, we're seeing that with the recent moves in the last couple of days. We won't be surprised if the market overshoots."

Garcia said he would recommend investors "cautiously buy" stocks, but only those that are still lagging the index.

"I won't buy those that have already outperformed. Shift to those that still have some upside in valuation," he said.

Meanwhile, the Palace welcomed the news that the PSE index has breached the 7,000 level early Monday.

"This stands as a manifestation of continued confidence in the prospects of our economy, not only from the international community, but also from Filipinos who are raising their stake in our country’s success," presidential spokesperson Edwin Lacierda said in a statement.

"This is but one among many indicators of a resurgent Philippines. We must now ensure that our progress is sustained, and even accelerated. Your government continues to focus its efforts on ensuring that the economic revitalization embodied by the PSEi numbers impacts the widest possible segment of society," he added. - With report from Warren de Guzman, ANC