Wednesday, October 31, 2012

PSEi Ends Flat As Country Prepares for Long Weekend

Stocks traded higher for most of the day as month-end window dressing helped keep the PSEi in the green. However, sell-offs of index names during the last few minutes of trading pushed the index into negative territory.

The PSEi ended the day flat, drifting down 2.16 points or -0.04% to close at 5,424.51. Sectoral indices ended mixed with property (+0.80%) and holding firms (+0.46%) managing to eke out gains while mining & oil (-0.56%), financials (-0.43%), and industrials (-0.20%) ended lower.

Services (-0.04%), on the other hand, ended flat moving down less than a point. Top index gainers include MPI (+2.99%), FGEN (+2.53%), and EDC (+1.99%), while URC (-4.00%), MER (-2.08%), and GLO (-0.87%) were the day’s laggards. Market breadth was skewed positively with 87 advances versus 75 declines and 48 issues unchanged. Value turnover was at Php 6.35 billion.

The Bank of the Philippine Islands (BPI) reported that its net income as of September amounted to Php13.2 billion, with net interest and non-interest income combined surging by 17.6%. The unibank registered a 19.2% return-on-equity and 2.1% return-on-assets. Note that net interest income increased by 7.8% year-on-year, despite the prevailing low interest rate environment. The bank attributes this to the expansion of its asset base by Php50 billion, or +6.4%.

Metro Pacific Tollways Corp. (MPTC) has earmarked Php2.5 billion in capital expenditure for next year. This is for its expansion projects and road maintenance. According to MPTC Chief Financial Officer Christopher Daniel C. Lizo, this will be funded mostly by internal cash. Mr. Lizo added that the 2013 capex would include the Php600 million budget for the integration of Northern Luzon Expressway (NLEx) and Subic-Clark-Tarlac Expressway (SCTEx), though these would depend on the President’s approval.

Local government securities prices increased, still buoyed by the country's credit rating upgrade awarded by Moody's this week. In general, yields declined by an average of 4 basis points, led by the short-end and the belly of the curve which lost 10.8 and 1.1 basis points respectively.

The Philippine peso strengthened against the US dollar for a second day following an increase in remittances from overseas workers. News of monetary easing in Japan also boosted investor sentiment, increasing demand for emerging market assets. The local currency gained 2 centavos to close at 41.180.