Stocks hit 10-yr high
An article published in The
Philippine Star, January 4, 2007
By: Zinnia B. Dela Peña
The
stock market surged to its highest level in nearly 10 years yesterday, with
the benchmark index vaulting past the 3,000-point level on upbeat economic
prospects.
Dealers said the government’s improving fiscal position, higher remittances
from Filipinos working abroad which has spurred consumer spending, and hopes
of easing interest rates and inflation due to stable oil prices, are
encouraging more investors to buy stocks.
"Our market is off to a good start in 2007, and the strong finish of the
PSEi today has buoyed our expectations that the New Year will usher in more
growth for the local stock market," said PSE president and chief executive
officer Francis Lim.
The composite index surged 43.85 points to 3,020.70, its highest level in
nearly 10 years, after moving between 2,976.85 and 3,028.41. It was the
index’s best finish since April 4,1997, when it closed at 3,060.59.
The broader all-share index was up 20.89 points to 1,877.50. Gainers
outnumbered losers 76 to 35, while 49 stocks were unchanged. Volume was 4.59
billion shares worth P2.32 billion.
Lim said the market’s performance reflects the continued confidence of
investors on the country’s favorable economic prospects, which are perceived
to have significantly improved as an offshoot of welcome reforms in the
government.
Lim has vowed to pursue more reforms aimed at further attracting more
investors into the market and boosting market liquidty.
For his part, Mark Alan Canizares of Citiseconline.com said "the market is
geeting a boost from positive economic prospects locally and from the
broader optimism of emerging markets in the region."
Canizares said consumer-related stocks are starting to pick up since they
stand to benefit from increased spending ahead of the May elections.
"Investors have factored in the coming elections, that’s why consumer stocks
are getting a boost."
"It’s another bullish year for the equities market. The sound fundamentals
are perfect for a bull market to be sustained, at least in the near term,"
said Jose Vistan
ATR Kim Eng Securities Inc. expects the market to hit the 3,600 level this
year on rosy economic prospects aided by robust dollar remittances from
overseas Filipino workers, stable borrowing rates, a strong peso, and an
improving fiscal condition.
"Our target for the market is 3,600 this year. The growth will be driven by
the same catalysts that fueled the market last year, said ATR Kim Eng
Securities chair and president Lorenzo T. Roxas.
Roxas made this projection as he expressed confidence that ATR Kim Eng
Securities would maintain its dominant position among domestic brokerage
houses in terms of value turnover.
Overall, Kim Eng Securities ranks fifth or sixth among the 180 active member
brokers of the Philippine Stock Exchange.
Luz Lorenzo, regional economist at Kim Eng Research PTe. Ltd., is hopeful
that the increases in tax revenues last year coupled with the reduction in
national debt ratios would finally translate to increases in public spending
particularly on infrastructure, education and health services.
"We have seen the peso strengthen and the GDP grow faster. The challenge now
is to keep up the performance. There’s a good chance that the economy can do
just that, accompanied by reforms," Lorenzo said.
Lorenzo sees GDP, which measures the total market value of all final goods
and services produced in a given period of time, hitting 6 percent this
year.
With a humming economy, the capital market is expected to grow further which
should translate to a better business environment, said ATR Kim Eng
Financial Corp. director and executive vice-president Renato Leveriza Jr.
Under a more condudive business landscape, ATR-KE will continue to beef up
its presence in corporate finance with increased advisory and underwriting
activities especially with its long list of prospective initial public
offerings on its plate.