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By Likha C. Cuevas-Miel and Maricel E. Burgonio,
Reporters
LOCAL share prices closed higher on Thursday as
fund managers bought stocks to spruce up their portfolios before the
market takes a four-day break, but the peso gave up gains on
corporate demand for the dollar and a lull in remittance inflows.
At the Philippine Stock Exchange, the composite
index—the barometer for all stock prices of listed
companies—closed 1.5 percent higher to 3,667.64 while the broader
all-share index was up by 1.1 percent to 2,243.12.
About 1.6 billion shares worth P3.1 billion
changed hands on Thursday, with gainers outpacing losers 65 to 40
while 58 stocks ended flat.
Francisco M. Liboro, PCCI Securities Brokers
Corp. president, said the positive movement in the Dow Jones
Industrial Average and the broader S&P 500 index on the back of
news that fresh capital may be injected to some troubled financial
institutions affected by the sub-prime mess may have helped prop up
local share prices.
“There are less fears that the Asian markets
may be dragged down by the credit crunch,” he said. However, the
bigger factor figuring in Thursday’s rise was fund managers’
“window dressing.”
According to some analysts, fund managers buy
shares of companies under their portfolios to prop up the prices of
these shares to enhance their basket of funds. This is done by
buying cheaper stocks and selling them at a higher price when these
funds make the year-end report to their clients.
Ed Bancod, ATR KimEng Securities Inc. head of
research, said window dressing started on Wednesday but more can be
expected in the run up to the last trading day of the year.
At the Philippine Dealing System, the peso
closed at 41.60 against the dollar, depreciating four centavos from
Wednesday’s closing price of 41.280. Traders blamed the fall on
month-end corporate demand and slower remittance flows.
The local currency traded to a low of 41.240 and
a high of 41.600. Volume turnover went up to $459.250 million from
$326 million on Wednesday.
Traders said the peso could sustain the
41-to-a-dollar level until next week as remittances are expected to
surge due to the long weekend.
“The peso depreciated due to corporate profit
taking. If peso hits 41.680, it can break [the] 42 level tomorrow or
next week,” a trader said.
Another trader said investors are wary about the
country sustaining its economic growth momentum next year, as
Congress has yet to pass the General Appropriations Act of 2008,
which provides for a P1.236-trillion budget.
A big part of the government expenditure is
allocated for infrastructure development. “This will drive the
economy to grow next year,” Marcelo Ayes, Rizal Commercial Banking
Corp. vice-president said.
In the first nine months, the economy, as
measured by the country’s gross domestic product, grew 7.1
percent, the highest in more than two decades.
The economic growth is driven mainly by strong
remittance flows but the Bangko Sentral ng Pilipinas said earlier
said that investments are catching up in line with government’s
infrastructure development program.
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