Market opens 2013 with a bang
PSEi closes at new all-time high 5,860.99 pts
MANILA, Philippines - Local stocks ushered in the new year with a bang, rallying to a fresh all-time high as investors cheered last-minute efforts by US politicians to end the “fiscal cliff” stalemate that could have driven the world’s largest economy back into recession.
The US Congress approved a bill designed to block massive middle class tax increases and spending cuts, resulting in a hard-fought political triumph for President Barack Obama less than two months after being re-elected to a second term.
The legislation is seen to raise around $600 billion in new revenues over 10 years.
The 30-company Philippine Stock Exchange index (PSEi) hit a new intra-day high of 5,866.83 prior to closing at a record 5,860.99, up 48.26 points or 0.8 percent from the end-year closing level on Dec. 28. This impressive level surpassed the previous Dec. 26 peak of 5,832.83.
“World markets have cheered the photo-finish resolution of the fiscal cliff in the US. We’re off to a good start in 2013,” said PSE president and chief executive Hans B. Sicat.
A total of 2.2 billion shares valued at P4.35 billion changed hands yesterday. Gainers outpaced decliners, 128 to 46, while 29 issues were unchanged.
The gains were notched across industry sectors, led by holding firms and services companies.
Investors loaded up on shares of GT Capital, the listed flagship firm of banking tycoon George S.K. Ty, Hong Kong-based First Pacific Co. Ltd.’s Metro Pacific Investments Corp., taipan Henry Sy’s SM Investments Corp. and conglomerate Ayala Corp.
After lagging behind, the mining and oil index saw a marked recovery with larger mining firms such as Atlas Consolidated Mining and Lepanto Consolidated rising 3.1 percent and 2.73 percent, respectively.
Local stock brokearage AB Capital Securities, however, cautioned investors against heavy investments in the mining sector until world prices of commodities recover and all legal matters concerning the Mining Act are ironed out.
The PSEi reached record levels 38 times last year on the back of the country’s strong economic fundamentals, a record low interest rate regime and robust corporate earnings.
“In 2013, we will once again be challenged to become better and to push the market to even greater heights. Our plans for the exchange and stock market have been laid out and I assure you that there is great reason to be excitedagain this year,” Sicat said.
Accord Capital Equities Inc.’s Jun Calaycay said the momentum of 2012 is expected to carry over to 2013 with additional impetus from the mid-term polls in May.
He said the main challenge for the economy would be sustaining the impressive run it made in 2013. “The first quarter will be the litmus test specifically if it can better the 6.3 percent posted in the first three months of the year,” Calaycay said.
Among the stocks that are expected to perform well are those in sectors that are to benefit from election-related spending. These include media, telecoms, consumer goods, retail and transportation.
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