Stocks extend record streak on robust GDP growth

MANILA, Philippines - Bulls continued to dominate the local bourse as the main index galloped to a new all-time high, bolstered by the country’s better-than-expected economic growth data in the third quarter, defying the overall decline in regional markets.

Data released by the National Statistical Coordination Board yesterday showed that the country’s gross domestic product (GDP), which measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy, expanded at a two-year high of 7.1 percent in the third quarter, the fastest growth in Asean. The figure is up from six percent in the second quarter and above analysts’ forecast of 5.4 percent.

The main benchmark index soared to a fresh record for the 31st time this year to 5,633.72, up 47.27 points or 0.85 percent on bullish sentiment, driven by rosy prospects in the country’s economy. A total of 4.14 billion shares worth P8.66 billion changed hands yesterday.

The upswing was led by the property index after investors scooped up shares of property heavyweights SM Prime Holdings Inc. and Ayala Land, which rose 4.28 percent and 1.08 percent, respectively, to P15.12 and P23.40 each share.

The release of the third quarter GDP results follows the government’s announcement that Philippine industrial output rose in September compared to that in the same month in 2011,  indicating that the country’s economic growth momentum is continuing.

“The market extends its rally on better than expected GDP numbers.  An indication that fourth quarter GDP could be even better. The market appears to have the gas to further extend this rally,” said Jonathan Ravelas, market strategist at Banco De Oro Unibank.

Astro Del Castillo, managing director at First Grade Finance Inc., said: “It’s Christmas in November with this fantastic economic growth.  Optimism overpowers pessimism on the back of buoyant retail spending and a robust economy.”

Ravelas said developments in the global markets will play a critical role in the market’s direction. “External fears arising from the US and euro could cap the market’s gain,” he said.