Upon learning that thousands of households are still in the danger zones in Tacloban three years after Yolanda, President Duterte ordered...
Wednesday, October 19, 2016
Philippine Stocks Surge Most in Asia Amid Duterte’s China Trip
Philippine stocks advanced the most in five months amid optimism that President Rodrigo Duterte’s visit to China will improve relations and yield a raft of business deals.
The Philippine Stock Exchange Index rose 2.9 percent to 7,571.15 at the close of trading in Manila at 3:30 p.m. local time, the steepest gain since May 11. SM Prime Holdings Inc., which has malls in the Philippines and China, jumped 6.5 percent, while restaurant operator Jollibee Foods Corp. added 4 percent.
“There is optimism that the pivot to China will yield results,” said James Lago, head of research at PCCI Securities Brokers Corp. in Manila.“The Philippine market is also at such oversold levels already that valuations are now more reasonable.”
Duterte started a four-day visit to Beijing Tuesday, bringing with him more than 400 business leaders, including some of the wealthiest Philippine tycoons. His meeting will provide an opportunity for a reset of relations with the country’s biggest trading partner, which have been strained by territorial disputes in the South China Sea where as many as six claimants are vying for fish, oil and gas.
The Philippine stock gauge has retreated 6.6 percent from its peak in July as concerns about elevated valuations exacerbated by Duterte’s volatile response to critics of his deadly anti-drug campaign sparked a selloff by foreigners. Overseas investors pulled a net $2.23 million of Philippines equities on Tuesday, a 10th straight day of outflows.
Valuations in the stock measure last Thursday sank to 17.3 times 12-month estimated earnings, the lowest level since May 9, according to data compiled by Bloomberg.
“A couple of catalysts drove up the market," said Basil Jason Go, who helps manage about $1.04 billion as fund manager at Security Bank Corp. “Remittances exceeded expectations" while “people are expecting something positive from President Duterte’s trip to China," he said.
Central bank data on Monday showed money sent home by overseas workers in August grew 16.3 percent in August, three times the average of economists estimates in a Bloomberg survey.
SM Investments Corp., parent of SM Prime, climbed 4.1 percent, while JG Summit Holdings Inc., which owns an airline, shopping malls and a food manufacturer, jumped 6.6 percent. Bloomberry Resorts Corp. rose 3.1 percent.