The stock market rallied Thursday, taking its cue on the regional market, on increasing risk appetite and confidence the Federal Reserve will delay an interest rate rise until the new year.
The Philippine Stock Exchange Index gained 24.88 points, or 0.4 percent, to 7,117.78 on a value turnover of nearly P5.7 billion. Losers edged gainers, 93 to 82, with 42 issues unchanged.
Philippine Long Distance Telephone Co., the biggest telecommunications firm, climbed 2 percent to P2,294, while Manila Electric Co., the largest retailer of electricity, advanced 1.9 percent to P317.80.
Megaworld Corp., the biggest lessor of office spaces, surged 3.6 percent to P4.60, while BDO Unibank Inc., the largest lender in terms of assets, rose 1.2 percent to P104.
Stocks in Southeast Asia are climbing at the fastest pace in two years relative to global peers as investors from Aberdeen Asset Management Plc to BlackRock Asset Management forage for bargains after a global equity rout slashed valuations.
The MSCI Southeast Asia Index has rebounded 11 percent this month, 5.1 percentage points more than the MSCI All-Country World Index, the widest gap since November 2013.
Indonesia’s Jakarta Composite Index has jumped 12 percent since slumping to a two-year low last month, while Phisix has rallied 2.9 percent after seven straight months of losses through September.
The revival in investor appetite underscores confidence that the region’s $2.57 trillion economies are well placed to weather a slowdown in China’s export demand after August’s surprise yuan devaluation sent stock markets tumbling. Foreign investors are returning after pulling a record $5.1 billion from Thai, Philippine and Indonesian shares in the three months through September, lured by cheaper valuations and economic growth that’s forecast to outpace the global average in the next two years.
“We are beginning to see selective opportunities in Asean markets after the recent correction,” Andrew Swan, the Hong Kong-based head of Asian equities at BlackRock, which oversees about $4.5 trillion, wrote in an e-mail last week. “Valuations are more attractive now, although not yet at what we would regard as crisis levels.”
The regional measure plunged 20 percent in the third quarter amid concerns the US was edging closer to raising interest rates and a weakening Chinese economy would further curb growth. The Southeast Asia index’s price-to-book ratio fell to a multiple of 1.4 last month, the cheapest relative to the world gauge based on data going back to 2009.
The Stock Exchange of Thailand Index is trading at 15 times reported earnings, the cheapest in about 20 months, even after rallying 9 percent from an August low. Foreign funds have bought a net $202 million of Thai shares in October after a four-month, $2.9 billion selloff. Vietnam’s VN Index, Asia’s best-performing equity gauge this year with an 8.2 percent gain, is valued at 11.6 times profits, the lowest in Southeast Asia. With Bloomberg, AFP