Philippines shares soar on bargain hunting

Philippines share prices closed 0.77 percent higher on Tuesday as bargain-hunting took hold after a three-day downturn, dealers said. However, they said trade was thin as investors exercised caution ahead of the Supreme Court's decision on whether to implement the new expanded value-added tax (VAT) law they had suspended in July.
A decision is expected this month. The Philippine Stock Exchange composite index rose 15.17 points to 1,990.00 after trading between 1,979.94 and 1,993.31. Volume amounted to 839.77 million shares worth 792.4 million pesos (14.17 million dollars).
The broader all-shares index rose 12.59 points to 1,209.70. Gainers beat losers 57 to 22, with 46 stocks ending unchanged. The Philippine peso averaged 55.894 to the US dollar at the close of trading at the stock exchange.
Dealers said investors are hopeful that the Supreme Court will rule favourably on the new VAT law, which the government has been counting on to address its budget deficit problem.
"A decision from the [Supreme Court] would provide the government a clear direction on how to go about its fiscal concerns. Investors are hoping for a favourable ruling," said Gomer Tan of Regina Capital Development Corp.
Dealers said investors have continued to take positions in stocks that have yet to release their first-semester earnings results and those that have upgraded their earnings forecasts for the full year.
"Selective buying may have been triggered by government's pronouncement that the GDP (gross domestic product) growth would not be revised despite the changes in the trade data," said Ron Rodrigo of Accord Capital Equities.
Economic Planning Secretary Augusto Santos said Monday that the recent revision to the country's trade data - which caused the trade deficits for years 2002 to 2004 to sharply widen -- will not affect this year's GDP growth target of at least 5.3 percent.
He said that this year's growth forecast had already incorporated the revised trade data. SM Investments Corp was the most active stock, rising 13.00 pesos to 239 pesos. Philippine Long Distance Telephone Co was second top-traded, rising 10 pesos to 1,630 pesos.
SM Prime Holdings gained 20 centavos to 7.30 pesos. San Miguel Corp A shares, limited to Filipino investors, was steady at 69.50 pesos while San Miguel B, available to foreign investors, ended unchanged at 99.50 pesos.