PHILIPPINE NEWS SERVICE — Shares surged to their highest level in 10 years yesterday, inspired by relatively smooth mid-term elections, while the peso rallied to a new six-year high of 46.95 to the dollar, buoyed by remittances from Filipinos working overseas that piled up during the three-day weekend.
“The generally uneventful elections helped erase political risks and allowed investors to focus on the strong corporate results in the first quarter,” said Ron Rodrigo, an analyst at Unicapital Securities Inc.
The benchmark 30-company Philippine Stock Exchange Index advanced 44.12 points, or 1.3 percent, at 3,408.73, hitting a high of 3,432.82 and a low of 3,364.61. It was the best finish since Feb. 4, 1997 when the market ended at 3,398.89. The all-time high of 3,447.60 was set the day before.
The broader all-share index rose 32.07 points to 2,173.65. Gainers led losers 85 to 33, with 49 stocks unchanged.
Turnover stood at 3.9 billion shares worth P5.7 billion.
Markets were closed Monday for the congressional and local elections.
The peso’s intra-day trading high of 46.95 was its strongest since October 2000.
“I think the market believes that the generally peaceful [political] exercise would further support the country’s sound macroeconomic fundamentals. The continued influx of [workers’] remittances and dollar inflows into the stock market buoyed the peso further,” said Bangko Sentral ng Pilipinas Gov. Amando Tetangco Jr.
“With the political risk out of the way, the upturn of the peso should resume with the acceleration of the investment flows in the stock market,” said Marcelo Ayes, senior vice president for treasury of Rizal Commercial Banking Corp.
The vast army of Filipino workers overseas sent $1.3 billion home in March, up 26.4 percent over the same period last year, the central bank said.
It was the 11th consecutive month that remittances surpassed the billion-dollar mark.
The bank said remittances for the first quarter of the year totaled $3.5 billion, up 24 percent on the same period last year.
Stock market traders, meanwhile, said the bourse may soon succumb to profit-taking after the market’s recent rally.
Dealers said investors were relieved that the elections passed off relatively quietly for the Philippines.
“The equities market was already moving up prior to the elections and investors reacted favorably to the high turnout. There were isolated cases of violence but in general, the polls demonstrated that democracy is working in the Philippines,” said Jose Vistan of AB Capital Securities.
Lawrence de Leon of Accord Capital Equities, however, said caution might prevail in coming sessions as the election results come in.
“Some investors will [be cautious] while the votes are still being counted. We hope there will be no nasty surprises that can upset the market. We are within sight of breaking the all-time high,” De Leon said.
Property developer Megaworld Corp. was top traded, gaining 4.1 percent at P3.80 after its first-quarter profit rose 30 percent on year.
Philippine Long Distance Telephone Co. went up P15 at P2,565 while Globe Telecom lost P10 to P1,340.
San Miguel Corp. shares extended gains on a plan to diversify into other businesses, with A shares higher by 7.8 percent at P76, and B shares rising 7.4 percent to P87.
A shares are exclusive to local investors, while B shares are available to local and foreign investors.