PSEi hits 24th record on PHL investment grade rating.
Siegfrid O. Alegado, GMA News – March 27,2013
Trading in Philippine shares closed at a new record high on Wednesday after Fitch Ratings gave the country an investment grade rating for the first time since the stock market opened in 1927.
The benchmark PSEi gained 182.35 points or 2.74 percent to 6,847.47, its 24th record close this year, eclipsing the 6,835.21 posted on March 6.
The benchmark index also posted a new intra-day record of 6,873.89, translating to an over-200-point jump in the index—the highest one-day gain for the year. For the first quarter, the PSEi is up 18 percent or 1,034 points.
“The rally was in line with the Philippine investment grade rating upgrade by Fitch,” Juan Rafael Supangco, research head at Angping & Associates Securities Inc., told GMA News Online in a phone interview.
On Wednesday afternoon, Fitch Ratings upgraded the Philippines to ‘BBB-‘ or investment grade from ‘BB+’—citing a resilient economy and improved fiscal management—with a stable outlook. The Philippine government and private companies will now be able to borrow funds at lower interest rates, as the investment grade rating automatically reflect low risk of a default on payments, Supangco said.
“Much more fresh money will also come in, as some companies have restrictions on investing only in investment grade rated countries,” he added. The upgrade will have “long-term implications for the country and the PSEi,” Supangco noted. “Momentum will still be carried over towards next week,” he added.
BDO Unibank chief market strategist Jonathan Ravelas said in a separate phone interview the “… market will continue to re-test new highs next week.”
Wednesday’s run-up to a new record was “driven by the positive sentiment generated by the upgrade,” Philippine Stock Exchange president and CEO Hans Sicat noted in an e-mailed statement.
“We are now officially an investment grade country with this upgrade by the Fitch Ratings agency and this is an achievement that we all should be proud of. We have been talking about this in the past 12 months and we think it is well deserved,” Sicat said in an e-mailed statement.
“Hopefully, the other rating agencies will follow suit so we can start seeing more investors participate in the growth of our listed companies and the economy,” the PSE official added.
Philippine markets will be closed for the four-day weekend for the Holy Week holidays starting Thursday, March 28.
On Wednesday, the broader all-shares index was also up by 1.70 percent to 4,234.31. Gainers overwhelmed losers 110 to 44, while 35 counters were unchanged. Most indices were in positive territory, except for mining and oil which dipped by 0.06 percent. Leading the rally was a 3.88-percent leap registered by the property sector. Over 2.28 billion shares valued at P12.92 billion changed hands. — BM/VS, GMA News