Philippine stocks recover on generally peaceful elections

The Philippine stock market recovered on Tuesday following the peaceful general elections a day ago in the country and the strong performance of the overseas markets on Monday.

The bellwether Philippine Stock Exchange index jumped by 3.84 percent or 120.87 points to 3,262.93, while the all share index soared by 3.54 percent or 69.65 to 2,036.42.

The trading volume was above average with 1.74 billion shares valued at 5.91 billion pesos (129.29 million U.S. dollars) changing hands after buyers swarmed the battered stocks. Foreign investors, however, were net sellers with 1.15 billion pesos (25. 15 million U.S. dollars).

Gainers beat losers 117 to 12 while 32 shares did not move. Likewise, all six subsector indices finished higher.

"(Tuesday's) rally was caused by a combination of factors, both local and overseas. The country had a relatively uneventful election and this pleased investors. Europe and the U.S. equity markets also rallied (on Monday)," Lawrence de Leon, an analyst with local brokerage Accord Capital Equities Corp., said in an interview.

De Leon said most investors "were expecting something worst to happen" as Filipinos cast their votes in the country's first automated general elections on Monday.

Prior to Monday's big event, reports of the 2010 general elections not pushing through grabbed the headlines especially after technical glitches bogged down vote-counting machines during their test days. Election-related violence was also reported in some parts of the country.

Except for the violence -- which was common incident in the past elections -- most of what investors feared did not materialize, de Leon said, adding that although some of the vote- counting machines malfunctioned, these however were "manageable."

"There were also encouraging economic data that came out in the U.S. on Monday. The 1 trillion U.S. Dollar debt package of Greece, which helped lift the European market, also contributed to the local market's sharp recovery on Tuesday," de Leon said.

The Dow Jones industrial average rallied by 3.9 percent or 404. 71 points to close at 10,785.14 on Monday while Europe's FTSE 100 index skyrocketed by 5.16 percent or 264.40 points to 5,387.42.

"Locally, we could see the rally to be sustainable for a few more days as most investors are still euphoric about (Monday's elections) but do not expect it to be as jumpy as what we saw (on Tuesday)," de Leon said.

For the next three trading sessions, the analyst said, there is a "good chance" for the local composite index to test the elusive 3,300 level as the upside still remains high.

As expected, most stocks in the 30-company index closed higher.

Among the local market's most actively traded issues are heavyweight Philippine Long Distance Telephone Co. (PLDT), Ayala Corp. and property arm Ayala Land, Inc.

Source:Xinhua