Breaking the 6,000 mark for the first time in the 86-year history of stock trading in the country, Philippine shares on Monday closed at a fresh record high on expectations of the continued robust growth of the economy.
Traders noted that foreign investors were heavy buyers during the morning and afternoon sessions.
The PSEi gained 73.46 points or 1.23 percent to 6,044.91 points.
The rally was also sustained in the broader all-shares index, which rose 0.88 percent to 3,811.71 Monday. All indices were in positive territory, led by mining and oil sector.
Over 3.3 billion shares valued at P8.51 billion were traded. Gainers overwhelmed losers 107 to 71, while 39 stocks were unchanged.
Fueled by positive sentiment, the PSEi broke through the 6,000 level for the first time hitting 6,001.17 at 9:41 a.m. Monday.
Monday’s close was the fourth consecutive record high notched by PSEi since trading resumed on Wednesday, Jan. 02, after pausing for the New Year holidays. The market lodged 38 all-time highs last year.
“The PSEi’s bull-run was caused by follow through buying by investors. There is heavy foreign buying on shares of Megaworld and Metro Pacific Investments,” said Manny Cruz, Asiasec Equities Inc. market strategist.
Analyst Krizia Syquiapco at PAPA Securities Corp. said, “It’s a continuation of the rally last week. A lot of investors are already positioning in the country – the core or underlying factor is the expected strong economy.”
Analysts view increased infrastructure and election spending this year as primary drivers of the growth.
In early December, Socioeconomic Planning Secretary Arsenio Balisacan projected the economy will expand at 6.5 percent last year, with the government maintaining its 6 percent to 7 percent growth goal for 2013.
Both Cruz and Syquiapco expect the market to correct in the coming days. “The market is ripe for profit-taking,” said Cruz.
Syquiapco said the PSEi’s immediate support levels are at 5,870 and 5,800.
In a statement Monday, PSE president and CEO Hans Sicat noted the PSEi’s performance reflected investor confidence on prospects for the economy and earnings of listed companies.
“We are very proud to have reached and breached the 6,000 level which affirms that market liquidity continues to be strong and investor sentiment remain positive over good news both locally and abroad,” the PSE official said.
“We also believe that corporate earnings will remain strong for the full year of 2012, which should support the market’s phenomenal performance,” he added.
On Monday, First Metro Investment Corporation, the investment arm of the Metrobank Group, projected corporate earnings to grow by 18 percent to 20 percent this year, and the PSEi to trade around 6,800 before 2013 ends.
Citing government efforts in keeping the economy buoyant, Malacañang said the PSEi’s record breaking advance is “reflective of sustained investor confidence in the local bourse and is an indicator of the bullishness and vibrancy of the Philippine economy.”
“The strong performance of the PSEi is a validation of the Aquino administration’s bold reforms and tireless commitment to good governance that have resulted in growth that we continue to ensure is more inclusive and equitable for our countrymen,” it said in a separate statement Monday. — With Amita Legaspi/VS/HS, GMA News
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