Philippine Stocks Advance, Led by SM Investments, Ayala Land

Philippine stocks rose on expectation the U.S. Treasury and the Federal Reserve may take steps to curb credit losses, helping avert recession in the Southeast Asian nation's biggest overseas market for labor and goods.

SM Investments Corp. (SM), owner of the nation's largest mall operator and second-largest bank, and Ayala Land Inc., the biggest Philippine property developer, led the advance.

Fed officials signaled more interest rate cuts may be on the way, boosting Asian stocks on Nov. 30 when the Philippine stock market was closed for a holiday. U.S. Treasury Secretary Henry Paulson, who said Nov. 30 he was moving ``fast'' in seeking a solution to the subprime crisis, may announce an agreement with banks to stem credit losses today.

`Investors are going back into the market given the renewed confidence that the Fed and Treasury are going to take the necessary steps to avert further credit losses that could push the U.S. economy into recession,'' said Allan Yu, who helps manage the equivalent of $3.17 billion at Metropolitan Bank Trust Group in Manila.

The Philippine Stock Exchange Index (PCOMP) gained 48.33, or 1.4 percent, to 3,626.88 at the close in Manila. Gainers outnumbered decliners 113 to 16, while 36 companies were unchanged in the broader market.

SM Investments gained 15 pesos, or 4.6 percent, to 342.50. Ayala Land rose 50 centavos, or 3.3 percent, to 15.75 pesos. Metropolitan Bank & Trust (MBT) Co. added 2.50 pesos, or 4.6 percent, to 56.50.

Instability Concerns Eased

Paulson, who led a meeting of bankers and regulators on Nov. 29, is negotiating an agreement to fix interest rates on some troubled loans to stem a wave of foreclosures that threatens to drive the U.S. economy into recession next year. The U.S. accounted for 18 percent of the Philippines' exports in 2006 and about half of the money sent home by Filipinos working overseas.

The arrest of Sen. Antonio Trillanes and General Danilo Lim who took over a hotel in Manila on Nov. 29 and called for President Gloria Arroyo's ouster, also eased concern about political instability in the country which capped gains in Philippine stocks last week, Yu said.

Trillanes and Lim took over the Manila Peninsula after walking out of his trial on coup charges. The two were arrested later the same day.

``The arrest means that the Trillanes escapade was nothing but a nuisance,'' Yu said. ``That provided relief to the market.''

Manila Electric Co. (MER), the nation's largest power distributor, added 3 pesos, or 4.1 percent to 75.50. PNOC Energy Development Corp. (EDC), the largest geothermal power producer, gained 20 centavos, or 2.9 percent, to 7.10 pesos.

Globe Telecom Inc. (GLO), the second-largest Philippine mobile phone company by market value, rose 40 pesos, or 2.6 percent, to 1,560. Megaworld Corp., the second-largest Philippine developer by market value, added 10 centavos, or 2.6 percent, to 4 pesos.

Jollibee Foods Corp. (JFC), the Philippines' biggest fast-food company, increased 2 pesos, or 4 percent, to 51.50.

IPVG Corp., a software and Internet-content provider that's expanding into call centers, gained 80 centavos, or 10 percent to 8.60 pesos, after the company offered to buy Los Angeles, California-based PeopleSupport Inc., a provider of business services, for $356 million.

To contact the reporter on this story: Luzi Ann Javier at ljavier@bloomberg.net.

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