Philippine stock market ends 2010 with a ‘whimper’

LOCAL share prices and the peso ended the year on a positive note, with the benchmark stock index breaching the 4,200 level in light trading ahead of the New Year holiday.

At the Philippine Stock Exchange, the composite index inched up 1.83 points, or 0.04 percent to end the year at 4,201.14, supported by window-dressing activities and portfolio positioning, analysts said.

Year to date, the PSEi has risen 37.62 percent from gains accumulated during the September to November rally, making it one of the best performers in the region.

The broader all-shares index rose 18.20 points, or 0.61 percent to 3,006.42.

Gainers beat losers, 82 to 56, while 45 stocks were unchanged. A total of 1.67 billion stocks worth P5.499 billion were traded. Total value turnover reached P1.21 trillion, 29.8 percent higher than the P930.4 billion posted in 2009.

“We ended the last trading day of the year with a whimper, but we ended the year overall with a bang,” said Astro del Castillo of First Grade Holdings.

The market’s closing was well beyond the target range of analysts at 3,800 to 4,000 at the beginning of the year and within the upgraded forecast of 4,200, said Del Castillo.

The economy’s 7.5-percent growth in the first three quarters, as well as the benign inflation and low interest rates continue to fuel sentiment in the stock market and reinforce business confidence, said Hans Sicat, PSE chairman.

“Many of the developed, Western economies were showing signs of economic recovery despite the threat of some European nations’ bankruptcies. Overall, the major global stock markets were on an uptick this year, improving capital market conditions,” Sicat added.

By yearend, the combined market capitalization of listed issues rose 47.1 percent to P8.87 trillion from P6.03 trillion in 2009.

Preliminary data showed that foreign investors went net buyers at P35.6 billion, higher than the P14.9 billion last year.

Total capital grew from the previous year’s P38.8 billion to P84.9 billion in 2010 mainly from the initial public offerings of Cebu Air Inc., Nickel Asia Corp. and IP Converge Data Center Inc., as well as the stock rights offerings of First Gen Corp., SM Development Corp. and Bank of the Philippine Islands.

In terms of sectoral indices, the Holding Firms index emerged as the best performer in 2010 as it climbed by 110.28 percent, followed by the Industrial index at 56 percent.

The outlook for 2011 remains positive on strong macroeconomic and corporate fundamentals, analysts said.

“As we enter a new chapter in 2011, we remain bullish that the initiatives and reforms we have started will enhance the growth of the capital markets,” Sicat said.

At the Philippine Dealing System, the peso ended the year with cheer on Thursday as the rest of the Asian currencies rose, cementing solid gains for 2010.

Although traders have projected the local unit to move sideways against the dollar, the peso came out stronger.

It closed at 43.84, gaining 2 centavos from Wednesday’s 43.86 finish.

Traders said the local currency took advantage of the weaker greenback overnight as well as players hedging their flows for the long weekend.

The pair tested the day’s low of 43.78 but failed to break it once again on the back of central bank intervention.

A wave of short covering was eventually seen which managed to push the pair to a high of 43.85.

However, persistent selling interest saw the peso-dollar exchange rate close at 43.84, traders said.

Total trading volume rose $964.76 million from $700.85 million the previous trading day.

The Bangko Sentral ng Pilipinas (BSP) said the peso strengthened on sustained investor risk appetite and positive domestic economic prospects.

Sustained inflow of overseas remittances, coupled with the strong inflow of portfolio investments remained the key drivers of the currency’s momentum.

Data from central bank showed that as of November 15, the peso has appreciated against the dollar by 5.7 percent, along with other Asian currencies.

Financial markets will reopen on January 3. –KRISTA ANGELA M. MONTEALEGRE AND LAILANY P. GOMEZ REPORTERS, Manila Times