Philippine shares soar to new high on US fiscal cliff deal

Bullish outlook on the local economy sent the Philippine stock market rallying to a new high on Tuesday. News that the U.S. government finally agreed on a deal to avert a fiscal cliff also helped fuel investors' appetite for local stocks. By the final bell, the bellwether Philippine Stock Exchange index gained 0.83 percent or 48.26 points to 5,860.99. The broader all-share index rose by 0.75 percent or 27.81 points to 3,726.79. Trading volume reached 2.24 billion shares worth 4.35 billion pesos (106.4 million U.S. dollars) with 128 stocks advancing, 46 declining, and 29 unchanged. All counters closed in the positive with the mining and oil sector, last year's laggard, recovering a percent of its value. "While legislation, environmental, and indigenous concerns still abound, the mining issues experienced a fresh start today, particularly the larger mining companies such as Atlas Consolidated Mining and Lepanto Consolidated Mining," Maria Arlysa E. Narciso of AB Capital Securities, Inc. said in her daily stock market comment. The analyst noted that Tuesday's gain was the result of the sustained bullish sentiments of investors on the country. The Philippines experienced a banner year in 2012 and bucked the widespread trend of weak markets, as strength from both economic and corporate factors pushed optimism higher. While global economies reeled and suffered from the financial crisis, the Philippines basked in better-than-expected economic growths, healthy macroeconomic indicators, and rating upgrades from international agencies, Narciso said. Overseas, the U.S. House of Representatives has already approved the bill to avert a fiscal cliff -- one of the primary concerns of investors. "All that being said, we look towards an at least 10 percent growth of the PSEi next year," Narciso said. The analyst said their target towards the end of the year is 6, 390 for the index. Stocks in the 30-company index were mostly up. These issues include SM Investments Corp., Banco de Oro Unibank, Inc., and Ayala Corp. In other news, the PSE reported Wednesday that publicly-listed corporations expanded their combined net profits by nearly 18 percent year-on-year in the January to September period 2012 thanks to a strong domestic economy. "The growth in nearly all sectors has also demonstrated the strength of the Philippine economy which, barring any negative circumstances, should continue to support expansion next year," PSE President Hans Sicat said in a statement. Five out of six sectors posted net income growths in the first nine months of 2012. The industrial sector was the best performer, while the mining/oil counter was the only counter that recorded a slowdown in profits.