Roundup: Lopez-related issues push up Philippine market Thursday

Lopez-related issues pushed up the Philippine market on Thursday, preventing it from tracking the flat movement of the U.S. market.

The bellwether Philippine Stock Exchange index went up by 1.26 percent or 36.88 points to 2,944.51, while the all share index rallied by 1.09 percent or 19.93 points to 1,846.71.

Trading was above average where some 2.53 billion shares valuing 4.15 billion pesos (87.12 million U.S. dollars) were exchanged. Foreign investors however were net sellers at 296 million pesos (6.21 million U.S. dollars).

All six subindices closed higher, led by the property counters which rose by 2.34 percent or 24.20 points to 1,055.58.

Market breadth was surprisingly positive with 62 stocks rallying and 49 issues slipping. A total of 62 shares were unchanged.

"Local trading performance was again highlighted by the activity in Lopez-related stocks, pushing the main index higher and bucking the trend of the U.S. market's intra-day reversal," research analyst Danielo Picache of local brokerage Papa Securities Corp. said in his daily stock market comment.

Picache said the said issues also prevented the local market from mimicking the performance of the Asian markets, most of which were trading in the red despite the U.S. Federal Reserve's optimistic pronouncement about the recovery of the U.S. economy.

Two of the Lopez issues were among the market's top gainers and were among the top three most actively traded stocks. Shares of its holding company First Philippine Holdings Corp. jumped by 6.42 percent to close at 58 pesos (1.21 U.S. dollars).

Likewise, parent Benpres Holdings Corp. added 7.89 percent to finish at 4.10 pesos (0.08 U.S. dollar) per share. The Lopezes is one of the Philippines' most influential families and has recently grabbed the headlines when it sold its shares in crown jewel Manila Electric Co. (Meralco), Philippines' largest power distributor.

Investors have been buying the Lopez issues in anticipation of the huge cash that it will generate from the sale of its remaining 13.4 percent stake in the power distributor after the son of the country's richest man Henry Sy, Jr. offered to buy it at 300 pesos (6.29 U.S. dollars) apiece, above its 221 pesos (4.63 U.S. dollars) closing price on Thursday.

Sy will be pitting against the local unit of Hong Kong-based First Pacific Co. Ltd.--Metro Pacific Investment Corp.--which was already closed to buying half of the Lopez's stake in Meralco prior to Sy's offer.

But while occasional corporate developments will move the market, Picache said he still believes that the market's sentiment is still heavily reliant on news coming from the world's major economies to provide indications that the global financial crisis is definitely behind now.

"Now that other countries are withdrawing their economic stimulus measures, it only holds that there is indeed a recovery underway," Picache said.

"In the Philippines, however, confidence has yet to be restored once again only if earnings results show better-than-expected figures until next year. So far, the results already released by locally listed firms show positive growth, although, I think this is already taken accounted for since last year's figures have a relatively low base," he added.

Stocks in the 30-company index closed higher with heavyweight Philippine Long Distance Telephone Co. gaining 0.19 percent to 2, 555 pesos (53.64 U.S. dollars).

"Bargain hunting would still be present... Less the buying interest into Lopez stocks, we continue to await any major trend reversal that would signal bullishness among investors with regards to the general market," Picache said.

"For now, there are already selective stocks that are subject to slow accumulation as their charts reflect a firming up of the base indicated by double bottom patterns and bullish divergences."

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