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Philippine Stock Market Goes Up Four-Year High

By Joann Santiago

The local stocks went up to the 5,300-level Friday and the peso closed to another four-year record due mainly to the third round of bond-buying program of the Federal Reserve.

The composite index rose by 1.56 percent, or 81.97 points, to 5,322.47 points from the previous day’s 5,240.50 points. It’s current record-high stands at 5,365.7-level, which the Philippine Stock Exchange index (PSEi) registered last July 3.

Similarly, the broader all shares index increased by 1.13 percent, or 39.48 points, to 3,530.66 points from day-ago’s 3,533.98 level.

All the sectoral indices also tracked the main index.

Value turnover reached P6.62 billion after 1.87 billion shares changed hands.

Gainers led losers at 113 to 47 while 45 stocks were unchanged.

Relatively, the peso closed to fresh four-year high against the US dollar at 41.42 from day-ago’s 41.75 finish. Its previous four-year record was last Tuesday’s 41.56 finish.

It started the day at 41.57, slightly weaker than day-ago’s 41.55 but strengthened in the afternoon trade given the fresh stimulus program of the Fed.

It’s strongest trade for the day stood at 41.40 and the weakest was at 41.58 resulting an average of 41.47 for the local unit.

Volume of trade reached US$ 1.23 billion, up from the US$ 1 billion in the previous day.

The Federal Open Market Committee (FOMC), after its two-day policy meeting ending Sept. 13, 2012, announced Friday (Manila time) the decision to implement another round of bond-buying program worth US$ 85 billion each month until the end of the year.

In a statement, the Committee said the decision “should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.”

The Fed maintained anew its near zero policy rate at 0.25 percent and expects the rate to remain at this level “at least through mid-2015.”

The committee noted that economic activity in the world’s largest economy remains weak, slow employment growth and high unemployment rate.

Should the labor market remains frail, the Fed said it would “continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.”

Traders traced the local unit’s performance to the developments in the US but cited that because of the lack of big news in the next two weeks, the peso is projected to trade between 41.25-41.50 in the next two weeks.

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