Market hits new high, nears 9,000 level

MANILA, Philippines — The stock market yesterday registered its strongest finish yet, rallying closer to the historic 9,000 level for the first time as investors banked on the prevailing optimism provided by the passage of the Duterte administration’s tax reform program.

Traders said the local market also tracked its regional peers, which posted gains following reports of possible peace talks between North and South Korea.

The main composite index soared 178.60 points, or 2.04 percent, to settle at a new record high of 8,923.72.

Likewise, the broader All-Shares index trailed close behind, rallying 72.86 points, or 1.43 percent to finish at 5,138.63.

Most counters were also up, led by the property and financials counters which expanded 2.40 percent and 2.24 percent, respectively.

The holding firms - mostly comprised of the country’s conglomerates - soared 1.72 percent, while the industrial gauge rose 1.17 percent.

Total value turnover was robust at P8.356 billion. Market breadth was positive, 118 against 93 in favor of advancing stocks with 47 issues left unchanged.

Top gainers were led by Sy-owned BDO, which rose 5.31 percent and another Sy-owned company, SM Investments, which gained 2.05 percent.

“We basically tracked our neighbors across the Asia-Pacific region which also posted gains. Nikkei marked a 26-year high at 23,849.99. This optimism was pushed by the start of inter-Korea peace talks and the weakening of the dollar,” said Jose Raymundo Ayad, research associate at Philstocks Financials Inc.

Thus, he said, the bulls outplayed the bears again to reach a new high of 8,923.72, following a brief rest on Monday.

“The market now sits on a 5.34 percent year-to-date, return which it gained in just five trading sessions. It has posted gains in four of these five sessions for the current year. For the moment, it appears that investors have set aside forecasts that inflation may peak at four percent this year, particularly in the first semester,” Ayad said.

The peso, however, went in the opposite direction, declining  further by ano-ther 14 centavos yesterday. The local currency closed at 50.290 from Monday’s 50.15 to $1. It opened weaker at 50.18 and hit any intraday high of 50.155 before losing steam to hit an intraday low of 50.34.

Volume jumped 15 percent to $917.2 million yesterday from $797.1 million last Monday as traders said the Bangko Sentral ng Pilipinas (BSP) continued to intervene to stem volatility.

Jonathan Ravelas, chief market strategist at BDO Unibank Inc., expects a move toward the 50.30 to 50.50 level in the near term.

ING Bank Manila senior economist Joey Cuyegkeng said the peso is seen weakening further this year, prompting the investment bank to revise its forecast to 51.50 to $1 by the end of the year.

“The weak external payment position is likely to resurface as a reason,” he said.

Meanwhile, Asian shares pared gains yesterday, pulling away from the cusp of a record high, while the yen stole the currency spotlight and jumped after the Bank of Japan’s slight reduction to its bond purchases reminded investors that it will eventually normalize policy.

 MSCI’s broadest index of Asia-Pacific shares outside Japan was nearly flat in afternoon trade after earlier rising as high as 591.28, not far from its record peak of 591.50 scaled in November 2007.

South Korea’s share market erased its gains and slipped 0.1 percent, dragged lower by a 3.1 percent drop in shares of Samsung Electronics Co.

Samsung’s guidance fell short of market expectations despite a forecast for a record fourth-quarter profit, as a strong won and one-off staff bonuses took the shine off surging DRAM chip prices.

The MSCI tech index for Asia slipped 0.1 percent, after it had gained more than five percent this year.

On Wall Street on Monday, the Dow Jones Industrial Average edged down 0.05 percent, the S&P 500 gained 0.17 percent, and the Nasdaq Composite added 0.29 percent. After the best start to a year in more than a decade, investors turned cautious ahead of earnings. – Lawrence Agcaoili