Thursday, January 3, 2013

PSE Reaches Early Record High for 2013

The local equities market rose to another record high following the statement of BSP Governor Amando Tetangco that interest rates will be kept low this year.

The PSEi closed at 73.06 points higher or +1.25% to 5,934.05 (5,960/5861 Hi/Lo). All sectoral indices ended higher, led by the mining and oil (+1.66%), property (+1.33%) and industrial (+1.13%) sectors.

Market breadth was positive with advances outnumbering declines 121 to 47 with 43 stocks unchanged. Value turnover reached Php7.53 billion (vs 2012 full year daily average of Php7.09 billion).

According to National Treasurer Rosalia De Leon, the Aquino administration is looking to borrow US$750 million to US$1 billion from the foreign commercial debt market this year with fund-raising activities to begin after January.

She added that the government is looking at raising the funds through the sale of global peso notes which in turn would spare the government from foreign currency debt. The US$750 million to US$1 billion is lower than the US$1.5 billion to US$2 billion planned foreign commercial borrowing for 2013 which was announced last November.

According to the Bangko Sentral ng Pilipinas (BSP), resources of the country’s banking sector continued to grow during 3Q12, buoyed by increased deposits from the public, as well as sustained profit generation. Data released yesterday showed that the combined resources of all banks in the country grew to Php7.86 trillion as of September 2012, 6.8% higher than the Php7.36 trillion registered during the same period last year.

Majority of the banks’ resources are composed of deposits from individuals and enterprises, and profits and retained earnings. The BSP added that universal and commercial banks accounted for much of the resources at Php7.05 trillion.

Prices of local government securities rose today following recent positive developments in the world’s largest economy. Yields declined by an average of 6.48 basis points led by the belly which dropped by 9.3 basis points. The short and long-ends of the curve likewise fell by 6.9 and 1.3 basis points, respectively.

The Philippine peso advanced to a 4-year high during today’s trading session on the back of better-than-estimated US manufacturing data which buoyed demand for emerging-market assets. The local currency gained 9 centavos to close at 40.770.