Philippines shares close 1.89 percent higher

Philippines share prices rose 1.89 percent on Thursday for another record finish as investors welcome another set of benign inflation figures, dealers said. Consumer inflation slowed to 2.3 percent in June from 2.4 percent in May, easing concerns over the outlook for interest rates.
The composite index jumped 70.66 points to finish at the day's high 3,802.32. The low was 3,730.64 points. The broader all-share index gained 37.26 points to 2,435.43. Gainers led losers 93 to 32, with 47 stocks unchanged. Volume was 3.5 billion shares worth 5.2 billion pesos (112.78 million dollars).
The peso was at 46.105 to the dollar. "Stocks were boosted by the benign inflation numbers. This confirms and strengthens the bullishness of the market," said Lawrence de Leon of Accord Capital Equities Inc "Low inflation figures help to sustain the current low-interest rate environment that has been fuelling the rise in stocks," he added,
The low inflation rate in June somewhat offset mounting concerns over the government's capability to meet its fiscal targets this year, said Chase Yap of 2TradeAsia. "A low inflation regime is positive news for interest rate-sensitive sectors such as property and banking."
Yap said investors have already priced in the government's fiscal problems but are still optimistic that it will be able to sell stakes in several key assets, such as San Miguel Corp and Manila Electric Co, before the end of the year.
"If ever the government does overshoot its budget deficit target this year, the difference may not be that big because it could still complete the sale of its stakes in San Miguel and other big-ticket assets," said Yap. Ayala Corp added 20 pesos to 585 pesos and unit Ayala Land Inc was up 25 centavos to 18 pesos.
Select mining stocks rose in line with firmer base metal prices. Atlas Consolidated and Mining Development Corp added 1.50 pesos to 16.50 pesos while Philex Mining Corp, the Philippines' oldest mining operator, inched up 10 centavos to 5.80 pesos.
Shares in San Miguel Corp, the country's largest food and beverage company, gained after it confirmed it was in talks for the possible sale of its stake in Australian dairy company National Foods to Japan's Kirin Brewery. San Miguel Corp's A-shares added 1.50 pesos to 75.50 pesos while its B-shares rose 3.50 pesos to 86.50 pesos.