Shares close at new 9-yr high on Moody's outlook upgrade


By Erik de la Cruz
Xinhua Financial News Service
Last updated 04:25pm (Mla time) 11/03/2006


(UPDATE) SHARE prices closed broadly higher, lifting the benchmark index to a new high in over nine years, as investors cheered Moody's Investors Service's upgrade of its outlook for Philippine credit ratings and the central bank's move to ease monetary policy, dealers said.

They said the Moody's action bolsters investor confidence in the economy, while the central bank's de facto cut in its key interest rate should buoy lending and boost economic growth.

The 30-company composite index closed up 45.08 points or 1.66 percent at 2,766.86, after moving between 2,726.24 and 2,777.98. It was the index's best finish since July 1, 1997 when it settled at 2,815.54. The key index gained 2.4 percent for the week.

The broader all-share index rose 24.38 points to 1,692.76.

Gainers outnumbered losers 55 to 41, while 54 stocks ended unchanged.

A total of 2.52 billion shares changed hands worth 3.1 billion pesos.

"We've been showered with a lot of positive economic news. Oil prices are declining, the peso is strong and interest rates are falling. And now we also have good news from Moody's," AB Capital Securities research director Jose Vistan Jr said.

"The market is overbought but when it is on the brink of correction, more market-friendly news would come in to boost share prices higher."

Moody's has finally removed its negative outlook for Philippine ratings nine months after Standard & Poor's and Fitch Ratings initiated the move, citing the government' improving fiscal performance, which has helped it reduce external borrowing.

Shortly before Moody's announced its decision Thursday night, the central bank decided to maintain its key overnight borrowing rate at 7.50 percent but only for bank placements up to P5 billion. It now charges lower rates for all placements in excess of P5 billion.

"We may see a correction if there's a drought in terms of news, but it may not happen next week when more third-quarter earnings are expected to come in," AB Capital's Vistan said.

Top-traded Metropolitan Bank & Trust Co rose P0.50 peso or 1.05 percent to 48.00 on volume of 9.8 million shares.

Philippine Long Distance Telephone Co, which will release its results on Tuesday, advanced P65.00 or 2.73 percent to 2,445.00.

Globe Telecom Inc, due to unveil its third-quarter performance on or before next Wednesday, jumped P50.00 or 4.39 percent to 1,190.00.

Conglomerate Ayala Corp gained P10.00 or 2.04 percent to 500.00 ahead of its quarterly results also due next week.

Property developer Megaworld Corp was up P0.10 or 4.35 percent at 2.40.

Food and beverage firm San Miguel Corp's A-shares ended flat at P66.00, while its B-shares edged up P0.50 to 74.50.

($1 = P49.75)

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