MANILA (Thomson Financial) - Philippine shares advanced on Thursday for the
second session in a row as investors cheered the continued pullback in crude oil
prices and ignored a signal from the central bank that key interest rates might
be raised further to combat inflation.
The drop in oil prices from the all-time peak above $147 a barrel on July 11
has stoked optimism that economic conditions in the second half would improve.
A barrel of U.S. light crude for September delivery fell 46 cents to a
seven-week low of $123.98 in early Asian trading on Thursday after tumbling by
more than $4 a barrel on Wednesday. Worries about the economic woes of the
United States, the world's top oil consumer, fuelled speculation that demand for
the commodity would weaken.
"Equities investors worldwide appear to be turning optimistic now on
earnings and economic data for the second half of 2008," said Francisco Liboro,
president of PCCI Securities.
Manila's 30-company composite index rose 72.97 points or 3.0 percent to
2,535.91, adding to the 2.2 percent gain on Wednesday.
The all-share index advanced 36.38 points or 2.3 percent to 1,594.29.
Advancers overwhelmed decliners 89 to 16, while 49 were unchanged.
Turnover improved to 2.9 billion pesos from Wednesday's 2.5 billion pesos.
But doubts remained whether the drop in oil prices and gains in stocks would
be sustained.
"It still depends on how external events unfold. Investors will remain glued
to the movements of U.S. markets and crude oil," said Lawrence de Leon, trader
at Accord Capital Equities.
U.S. stocks advanced for the second straight session Wednesday as another
decline in oil prices and several upbeat profit reports eased some of Wall
Street's concerns about the U.S.
economy.
"Investors are also likely to remain cautious given hints from the central
bank about possible further rate hikes in the future," de Leon said.
The Philippine central bank signalled on Wednesday that it would keep
raising borrowing costs to fight inflation which hit a 14-year high of 11.4
percent in June.
"Given the current inflation environment, and given that there are still
risks to the outlook, interest rate hikes cannot be ruled out at this point,"
central bank governor Amando Tetangco said.
The central bank raised key interest rates last week by an aggressive half a
percentage point, the second increase in two months, as it sees inflation
staying at double-digit levels for the rest of 2008.
Market heavyweight Philippine Long Distance Telephone Co. rose 1.0 percent
to 2,420 pesos. The stock was down 24 percent so far this year and was 26.3
percent off its all-time peak of 3,285 pesos hit in October last year.
Ayala Land Inc. advanced 3.3 percent to 9.30 pesos. The country's biggest
property developer expects to have matched a 42 percent growth in first quarter
net income during the April to June quarter, its president said on Wednesday.
Manila Electric Co. (Meralco) jumped 5.4 percent to 59 pesos. The country's
biggest power distributor said on Thursday it was seeking to recover from its
customers a total of 14 billion pesos, representing business-related costs.
Meralco said the Energy Regulatory Commission has allowed it to collect 8.8
billion pesos of those cost under-recoveries.
($1 = 43.9 pesos)
enrico.delacruz@thomsonreuters.com
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