Peso, stocks surge on smooth polls
- Zinnia B. Dela Peña () - May 12, 2010 - 12:00am

MANILA, Philippines - The country’s stock and currency markets surged yesterday – bucking the downtrend in the Asian region – as investors cheered the relatively peaceful conduct of the national elections, traders said.

Local share prices surged to an eight-month high yesterday with the main index, the PSEi, jumping 120.87 points or 3.8 percent – its biggest percentage gain since Aug. 24, 2009 – to 3,262.93.

The broader all-share index went up 3.54 percent or 69.65 points to 2,036.42 as advancers swamped decliners, 117 to 12, while 32 issues were unchanged.

A total of 1.76 billion shares valued at P6.08 billion were traded.

In contrast, world stocks fell yesterday as a relief rally triggered by a $1-trillion plan to contain Europe’s debt crisis fizzled out.

Europe opened lower and most Asian markets failed to sustain gains for a second day running after initially trading higher following Monday’s broad advance.

The Philippines on Monday held its first automated national elections with consistent survey leader Sen. Benigno “Noynoy” Aquino III, only son of democracy icons Ninoy and Cory Aquino, taking a commanding lead in the computerized tally.

At the foreign exchange market, the Bangko Sentral ng Pilipinas intervened yesterday to cap the rising peso, which was boosted by Aquino’s strong showing and a massive $1-trillion euro zone rescue package.

The peso jumped just over one percent to its intraday-high of 45.005 per dollar, but its strength was tempered by the central bank’s dollar-buying intervention.

But traders still expect the unit to break the 45 level soon.

“They (the central bank) just want to smooth out volatilities in the dollar/peso. Eventually if dollar/Asia continues to trade lower, 45 should be tested,” a trader said.

The peso fell 2.4 percent last week as preparations for the first change in Philippine leadership in almost a decade were hampered by reports of problems with ballot machines, leading some sectors to speculate a widespread failure of elections.

The local currency was biggest gainer yesterday among the 10 most active currencies outside of Japan.

Astro Del Castillo, managing director at investment advisory firm First Grade Holdings Inc., said the Philippines seemed to have pulled off a successful historic computerized election despite some machine glitches, long lines at the polling precincts, and several incidents of shootings and bombings.

“The peaceful holding of the polls and strong performance of global markets boosted investor confidence. It was an iron-clad rally boosted by commitments to stave off a European debt crisis. I think these two factors were enough to boost the local market,” Del Castillo said.

He said the market is expected to maintain its positive momentum in the next few days. “The most important thing is the pulse of people was heard. We have to respect the will of the people. We have more reasons to trek to a higher level. Fundamentally, we’re OK and most analysts are expecting this year will be a better one than the previous year,” he said.

Del Castillo advised investors to wait for the market to correct prior to taking positions.

Aquino, a presidential front runner, owes much of his popularity to his parents — his father Ninoy was an opposition leader assassinated during the administration of President Marcos while his mother Cory assumed the top post of the land during the People Power revolution in 1986 that eventually led to the exile of Marcos and his family.

The top three most active stocks yesterday were Philippine Long Distance Telephone Co. (PLDT) which rose 1.22 percent or P30 to P2,495, Aboitiz Power Corp. (up by P10 closing at P16.50) and Energy Development Corp. (EDC), which went up 3.8 percent to P5.40.

Bucking the general rally was property holding firm Vista Land and Landscapes, which fell 1.1 percent to P1.74 apiece, after its owner, Sen. Manuel Villar, accepted defeat in the presidential race.

  • Latest
  • Trending
Are you sure you want to log out?
Login is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

or sign in with