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Market rebounds; BDO climbs

Stocks rebounded Friday, on bargain hunting and as investors looked past the China-US trade row to focus on the booming American economy.

The Philippine Stock Exchange index, the 30-company benchmark, jumped 248 points, or 3.5 percent, to close at 7,383.00.  It was the biggest single-day gain this year.

The broader all-share index also climbed 95 points, or 2.2 percent, to settle at 4,507.40, on a value turnover of P11.6 billion. Gainers outnumbered losers, 114 to 86, while 43 issues were unchanged.

All the six subsectors advanced, led by the financial companies which surged 4.7 percent. Sixteen of the 20 most active stocks ended in the green, led by BDO Unibank Inc., the country’s largest bank, which soared 7.6 percent to P120.60 and conglomerate Aboitiz Equity Ventures Inc. which climbed 6.4 percent to P46.90.

Metropolitan Bank & Trust Co., the second-largest lender, gained 6.3 percent to P68, while food manufacturer Universal Robina Corp. added 6 percent to close at P151.

The upbeat mood on trading floors was being felt across the board, with embattled emerging market currencies seeing a recovery, while some observers suggested a fear of missing out was also providing some lift.

Regional dealers were given a strong lead from Wall Street, where the Dow and S&P 500 chalked up record closes as easing concerns about Washington and Beijing’s tit-for-tat tariffs were mixed with a string of positive US data, including on jobless claims and household net worth.

“Make no mistake, the US economy is running on all cylinders,” said Stephen Innes, head of Asia-Pacific trade at Oanda.

“Robust growth, soaring employment and rising capital investments, suggesting the healthy US economy is more than just a short-term knock-on effect from the intravenous elixir of easy credit and fiscal glucose,” Innes said.

That filtered through to Asia where Tokyo ended 0.8 percent higher, Hong Kong climbed 1.8 percent in the afternoon and Shanghai surged 2.5 percent.

Sydney gained 0.4 percent, Singapore jumped 1.3 percent and Seoul added 0.7 percent. Taipei and Jakarta were also well up. 

In early trade London and Frankfurt each rose 0.6 percent, while Paris was 0.4 percent higher.

“Fundamentals in many places are very strong, particularly the US,” Grant Forster, Principal Global Investors’ chief executive officer for Australia, told Bloomberg TV. “We don’t expect this [trade row] to really derail US growth at all.”

Emerging market currencies—beaten down in recent weeks by fears of contagion from crises in Turkey, South Africa, and Argentina—were also basking in the optimism as traders sought out higher-risk assets.

South Korea’s won rose 0.4 percent, while the Indonesian rupiah added 0.3 percent and the Indian rupee was up 0.7 percent, pulling it away from recent record lows. South Africa’s rand and the Turkish lira jumped more than one percent.

China’s yuan extended gains after Premier Li Keqiang said this week that Beijing would not devalue the unit to offset the impact of Donald Trump’s import tariffs. 

The pound and euro also extended Thursday’s gains following strong economic data out of Britain and Europe. Sterling is on course to break the $1.33 mark for the first time since the start of July.

The Hong Kong dollar jumped, with analysts suggesting dealers were betting on a possible rise in interest rates in the next few weeks as liquidity tightens. 

While the unit’s peg to the US dollar means the city’s monetary policy follows the Federal Reserve, an abundance of cash in the financial system has previously prevented the prime rate -- which affects mortgages—from rising. With AFP

Topics: Philippine Stock Exchange index , BDO Unibank Inc. , Aboitiz Equity Ventures Inc. , Metropolitan Bank & Trust Co.
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