Stocks jumped to a 10-month high Monday, as the weakest US jobs data since 2010 boosted optimism the Federal Reserve will delay raising interest rates and encouraged investors to bet on emerging markets such as the Philippines.
The Philippine Stock Exchange index, the 30-company benchmark, climbed 84 points, or 1.1 percent, to close at 7,598.22, the highest since it reached 7,662.55 on Aug. 5, 2015. The bellwether was also up 9.3 percent since the start of the year.
The heavier index, representing all shares, also advanced 37 points, or 0.8 percent, to settle at 4,529.46, on a value turnover of P7.2 billion. Advancers led losers, 101 to 80, while 48 issues were unchanged.
Eighteen of the 20 most active stocks ended in the green, led by property developer Ayala Land Inc., which climbed 3.8 percent to P37.90. Megaworld Corp., another developer, gained 3.2 percent to P4.55, while Globe Telecom Inc. rose 2.5 percent to P2,408.
Marcventures Holdings Inc. and Global Ferronickel Holdings Inc. sank on concern Philippine miners in Mindanao will face closer scrutiny after President-elect Rodrigo Duterte warned companies whose operations threaten the environment to upgrade their practices or face closure.
Marcventures fell 4.3 percent to P1.80, the lowest close since Feb. 12. Global Ferronickel declined 2.2 percent to P0.88, its first loss in five days.
Duterte, who hails from the Philippines’ island of Mindanao, said on Saturday miners have to stop practices that destroy the environment. He used Surigao as an example of how a mineral-rich region in the northern area of Mindanao suffered calamities that environmentalists say were worsened by mining. At stake is an island that’s estimated to sit on $300 billion worth of mineral deposits, from nickel, copper to gold.
“Some investors are speculating that mines in Mindanao will face stricter hurdles because of Duterte’s pronouncements,” said James Lago, head of research at Manila-based PCCI Securities. “There will be speculation until these erring miners are named.”
The US, the world’s top economy added just 38,000 net new positions in May, a quarter of the amount expected and the lowest in six years, data on Friday showed. The addition of 38,000 workers, the fewest since September 2010, followed a 123,000 advance in April that was smaller than previously estimated, US Labor Department data showed on Friday.
The jobs report crushed bets on the US central bank increasing interest rates in the next two months, boosting the appeal of riskier assets in developing markets.
“The weak U.S. jobs data gives emerging markets another day to live,” said Jonathan Ravelas, chief market strategist at BDO Unibank in Manila. Still, concerns about “Brexit is creating volatility and profit-taking could ensue and temper the rally in markets,”’ he said. with Bloomberg, AFP
