LT Group Inc. (LTG), owner of half of the nation’s largest cigarette-maker, advanced 7.3 percent. Bank of the Philippine Islands, the country’s largest bank by market value, jumped the most since December. SM Investments Corp. (SM) climbed 3.8 percent after saying its unit plans a reclamation project.
The Philippine Stock Exchange Index rallied 2.7 percent to close at 6,362.26, the biggest gain since Sept. 19. The Asian Development Bank in a report today lifted its expansion forecast to 7 percent for this year from 6 percent previously, and also increased its 2014 estimate to 6.1 percent from 5.9 percent.
“The favorable economic outlook is boosting investors confidence that Philippine stocks remain a good bet,” Astro del Castillo, managing director at First Grade Finance Inc., said by phone. “There is confidence that valuations are fundamentally supported.”
Shares on the Philippine Stock Exchange Index (PCOMP) trade at 17.2 times 12-month estimated earnings, down from a record 20.9 on May 15, according to data compiled by Bloomberg.
The nation is well placed to withstand any volatility with its current account surplus and high foreign exchange reserves, the bank said.
The Philippine Stock Exchange Index lost 4.2 percent in the third quarter, extending a 5.6 percent slump in the three months ended June 30, amid concern the U.S. will pare monetary stimulus. The index closed at a record 7,392.20 on May 15 as accelerating economic growth and two debt rating upgrades to investment status lured foreign investors.
To contact the reporter on this story: Ian Sayson in Manila at firstname.lastname@example.org