MANILA – The insatiable appetite of investors for blue chips and attractive macroeconomic numbers caused the Philippine Stocks Exchange Index (PSEi) to breach last February 4 the 6,400-mark to close at an all-time high of 6,435.98, up by 117.37 points or 1.86 percent from the previous day’s 6,318.61.
It was the 14th time PSEi set a new record this year. The February 4 closing index was 11 percent up from last year’s closing index.
Market players and analysts expected the PSEi to move within a 6300-6500 range in the near-term.
Trading was brisk with all the sub-indices in green with 3.13 billion shares valued at P11.18 billion changing hands.
“Good news continues to feed the market bulls,” said Astro del Castillo, managing director of stock brokerage house First Grade Holdings, referring to the strong performance of the domestic economy, which grew at 6.6 percent in 2012.
“We’re now praying for a healthy correction of the market,” added Del Castillo, noting the market’s steady rise.
Aside from the sound macroeconomic fundamentals indicated by the strong domestic economic growth, the low-interest rate regime prevailed following a decision of the Bangko Sentral ng Pilipinas (BSP) to reduce the interest rate of the special deposit accounts (SDAs) to 3 percent, making the system more liquid.
Market players said the SDA effective rate of 2.4 percent opened the “liquidity flood gate,” some of which finding their way to the stock market.
The main index was up 2 percent to 6,447.31 during the early morning trade. Among the gainers in the morning session were property companies Ayala Land, SM Development Corp. and Robinsons Land Corp.
Analysts cited expectations of better corporate earnings and improving economic conditions as the driving force in the renewed buying interest of investors in equities.
Most blue chip companies had announced record capital expansion programs. These included PLDT, Meralco, San Miguel, Ayala Group, Megaworld, Alliance Global and Metro Pacific Investments.
Jonas Ravelas, chief market strategist of Banco de Oro, said the market is upbeat as investors wanted to start the Chinese New Year on a positive note.
He also said that the market rally can be sustained if the government continues to increase spending on infrastructure.(With reports from Manila Bulletin, Bloomberg and Dow Jones)