Philippine stocks rallied for a third day, led by consumer stocks, after funds sent home by overseas Filipinos grew more than expected and UBS AG said domestic consumption is continuing its “growth momentum.”
SM Investments Corp. (SM), owner of the nation’s biggest grocery and department store operators, rose 2.6 percent. Philippine Long Distance Telephone Co. (TEL), owner of the nation’s largest mobile phone provider, jumped 4.1 percent. Alliance Global Group Inc. (AGI) rose 2.2 percent after the Philippine Daily Inquirer reported today that the nation’s gaming revenue may reach $2.5 billion this year.
The Philippine Stock Exchange Index (PCOMP) climbed 2.3 percent to 6,483.23 at 11:08 a.m. in Manila, poised for its biggest three-day gain since September 2011. The gauge has rebounded 6 percent since sinking to a five-month low on June 13. Funds sent home by Filipinos, which account for 10 percent of the economy, grew 6.1 percent in April from a year earlier, compared with a 4.1 percent median estimate in a Bloomberg survey.
“Positive sentiments brought about by better-than-expected remittance growth is helping sustain the market rebound,” said Astro del Castillo, managing director at First Grade Finance Inc. in Manila. “The positive consumer outlook by UBS reinforces expectations that spending will remain resilient.”
Earnings at the nation’s consumer sector companies are forecast to grow 17 percent in the next two years, boosted by double-digit sales growth, according to a UBS report today.
“Established brands with extensive distribution networks, sound strategies and a good track record on execution will be the winners,” Chesca Bugia Tenorio, a UBS analyst, wrote in the report. “Overall consumption growth is evident in the food-manufacturing and restaurant segments.”
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