Philippine stocks continued to recover from a downtrend amid
renewed confidence that US lawmakers could close a budget deal averting
the so-called fiscal cliff coupled with news of a possible ratings
upgrade for the Philippines.
The PSEi rose 115.80 points or 2.05 percent to 5,752.39 points Wednesday from 5,636.59 Tuesday.
The broader all-shares index was also up by 58.01 points to 3,688.28 points, with all sub-indices ending the day in the green.
Over 2.8 billion shares were traded at P8.78 billion. Gainers edged higher on losers 110 to 46, with 59 stocks unchanged.
Analysts pointed out the surge was in line with the trend in Asian
markets that rallied on news that a budget deal in the US may soon come
about.
Agence France-Presse reported that Asian stocks were on the rise,
tracking developments in the US, where lawmakers are holding talks to
avert the huge tax hikes and deep spending cuts slated to come into
effect in two weeks.
Economists pointed out the
current the package would tip the US economy into recession or off a
“fiscal cliff” if no new deal is place before the year is out, AFP
noted.
“Euphoria of Asian stocks in general
contributed to the PSEi's positive trading today,” said Astro del
Castillo, managing director at First Grade Finance Inc.
Del Castillo also noted that reports of a possible ratings upgrade for
the Philippines helped push the PSEi into a “good Santa Claus rally.”
In its latest credit analysis, Moody's Investors Service said
Philippine fundamentals – economic strength, government financial
strength, institutional strength and susceptibility to risk – place well
within investment grade status and could warrant an upgrade.
In a separate interview, Nieves Securities Inc. analyst Miko Sayo said
firms s preparing to close books before year-end also contributed to the
PSEi's increase and will help the index move upward.
“Window dressing season has also started. So, it's likely an uptrend until year-end,” said Sayo.
Window dressing is a strategy used by fund managers, wherein they sell
poor performing stocks and buy high flying ones towards the end of the
year to improve their portfolio.
While Del
Castillo sees “more room for an upsurge,” he warned of offshore risks as
the PSEi continues to track developments abroad.
“The PSEi is still dependent on overseas news. What is achieved in the
US will likely spill over to the local market,” Del Castillo added. — VS, GMA News
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