Foreign buying drives Philippine stocks higher; PSEi up 1%

A liquidity driven rally, largely from foreign funds, pushed Philippine shares higher in active trading that lifted the main PSEi more than 1 percent from Tuesday’s level, research analysts said Wednesday.   Fund managers are not simply going into emerging markets because interest rates are low in the US and in Europe, they are also looking at “growth premiums,” said Mark Angeles, head of research at First Metro Securities Brokerage Corp.   Once the US monetary authorities go into QE (quantitative easing) to stimulate the US economy, more funds are expected flow toward emerging markets, Angeles noted.   The PSEi gained 49.82 points or 1.04 percent to close at 4,805.80.   More than 9.177 billion shares valued at P14.021 billion changed hands in Wednesday’s session.   Gainers led losers 121 to 48 with 41 issues closing unchanged.   “Partly because of low interest rates in the US and in Europe, funds are flowing, and just like water it has to flow somewhere… and in this case it happens to be flowing toward equities,” said a research analyst of a regional brokerage who asked not to be named so as not to be misconstrued by their clients.   “Essentially, lots of liquidity is helping the market,” said the research analyst whose brokerage accounts for the biggest turnover in the Philippine market, outside the block sales.   Apart from liquidity and growth premium, the Philippine market driven by a “very positive outlook, with the prospect of a credit rating upgrade from Standard and Poor’s,” said First Metro’s Angeles.   The upgrade was speculative last late last year, only “this time it’s about to happen,” Angeles noted.   The “big caps” are today’s market leaders, and the approach is to “buy on dips” with the PSEi gunning for 5,000, he added. — KBK, GMA News