THE local market continued its winning streak on Monday, climbing past 7,300 points to near record highs despite forecasts of a consolidation this week, on renewed buying interest following last week’s string of good economic news and rating upgrades.
The renewed momentum drove the benchmark index near its record high of 7,392.2 hit in May last year even if many stocks were deemed as overbought.
The Philippine Stock Exchange index (PSEi) hit its ninth high for the year on Monday, closing up 51.36 points or 0.71 percent at 7,314.94, after hitting an intraday high of 7,333.14.The All Shares climbed 28.50 points or 0.66 percent to 4,318.86.
Astro del Castillo, managing director at First Grade Finance Inc., said momentum was rekindled by last week’s economic upgrades from South Korea-based National Information and Credit Evaluation (NICE) Ratings Inc., Moody’s Analytics and the World Economic Forum’s (WEF) Global Competitiveness Index 2014-2015.
“It seems like the momentum is still there. Investors continue to flood the market because of the string of good news last week,” del Castillo said.
Last week, NICE Ratings raised the Philippines’ foreign currency rating to minimum investment grade of BBB- while Moody’s Analytics forecast that the Association of Southeast Asian Nations (Asean) economies including the Philippines will grow by 4.6 percent this year and above five percent next year.
The country also climbed seven notches on the WEF Global Competitiveness Index 2014-2015, landing in 52nd place out of 144 economies this year from its 59th place out of 148 countries in 2013.
Del Castillo said the firmer performance on Wall Street on Friday also helped boost sentiment in local shares. But, he said, the market is “hard to predict” as of now because the value of shares traded is beyond P10 billion, resulting in an “expensive market valuation.”
“But due to the market being expensive, it is seen to consolidate a bit within the week,” Del Castillo said.
Apart from industrials, the rest of the sub-indices posted gains. Financials went up 19.40 points or 1.17 percent to 1,680.76; holding firms rose 39.36 points or 0.62 percent to 6,409.19; services jumped 10.83 points or 0.48 percent to 2,263.47; mining and oil added 57.74 points or 0.32 percent to 18,045.31; and property gained 44.34 points or 1.60 percent to 2,811.57
Bucking the trend, industrials lost 36.55 points or 0.32 percent to 11,250.03.
Of the most actively traded stocks, Alliance Global Group Inc. ended flat while International Container Terminal Services Inc., Jollibee Foods Corp., and Puregold Price Club Inc. suffered losses.
The top gainers included Philippine Long Distance Telephone Co., SM Prime Holdings Inc., BDO Unibank Inc., Ayala Land Inc., Metropolitan Bank and Trust Co. and Bloomberry Resorts Corp.
Volume traded reached 1.529 billion shares valued at P10.129 billion. Decliners narrowly outnumbered gainers 95 to 90, while 39 shares ended flat.
On Friday, the main index rose 59.47 points or 0.83 percent to close at 7,263.58, off an intraday high of 7,264.87. The wider All Shares index also finished higher, up 33.47 points or 0.79 percent at 4,290.36.