Philippine shares close slightly higher ahead of Fed rate decision - UPDATE |
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Mon, 17 Sep 2007 06:36
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MANILA (Thomson Financial) - Philippine shares closed slightly higher Monday, with the Asian Development Bank's (ADB) rosy outlook for the domestic economy providing some encouragement, although caution prevailed ahead of the Federal Reserve's decision on interest rates tomorrow.Trading was subdued throughout the session, with a handful of blue chips advancing on light volumes as investors refrained from making aggressive bets while analysts are still divided on how much the Fed will cut its key rate.The composite index ended up 12.88 points or 0.4 percent at 3,307.43, after moving between 3,294.55 and 3,314.57.The broader all-share index was up a marginal 0.83 point at 2,087.57.Gainers beat losers 44 to 36, while 65 stocks were flat.A total of 3.4 billion shares valued at 3.4 billion pesos changed hands.During trading hours the ADB released its updated 2007 Asian Development Outlook report, which painted a bright picture of the prospects for the region's developing economies despite recent turbulence in financial markets.The Manila-based bank has upgraded its growth forecasts for the Philippines' gross domestic product to 6.6 percent from 5.4 percent for 2007 and to 6.0 percent from 5.7 percent for 2008.With China and India leading the growth in the region, the bank said the economies of Asia's developing nations could weather a slowdown in the US.'The ADB's report is encouraging and it confirms the positive outlook for the Philippines given by many fund managers and analysts. But the Fed's decision is really very crucial in restoring investor confidence in financial markets,' said Astro del Castillo, managing director at First Grade Holdings.The question is whether the Fed will cut its key interest rate by 25 or 50 basis points, and whether it will remain open to further rate reductions if necessary in order to prevent the US economy from slipping into recession, he said.The ADB's report followed Standard & Poor's announcement Friday that it has affirmed its 'BB-/B' foreign currency and 'BB+/B' local currency issuer credit ratings for the Philippines.S&P is keeping its stable outlook which, it said, reflects its assessment that local and foreign currency funding and rollover risks remain manageable after the global financial market turbulence and consequent tightening liquidity.'While the country has failed again in its bid to have its sovereign credit ratings upgraded, an affirmation of the present ratings should ease any undue credit fears from foreign fund managers who have grown more risk-averse lately as a result of the subprime problem in the US,' said Francisco Liboro, president of PCCI Securities Brokers Corp.Providing support for the main index were market leader Philippine Long Distance Telephone Co, which was up 15.00 pesos or 0.6 percent at 2,705.00 pesos.Shares in Ayala Land, the nation's biggest property developer, rose 25 centavos or 1.8 percent to 14.25 pesos.Ayala Corp advanced 5.00 pesos or 1 percent to 492.50 pesos, supported by the conglomerate's ongoing share buyback program.(1 US dollar = 46.18 pesos)enrico.delacruz@thomson.comed/jm/ms/ed/jm/zrCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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Philippine shares close slightly higher ahead of Fed rate decision 