Philippine Stocks Climb Most in a Year; Globe, PLDT Advance

By Ian C. Sayson

Aug. 6 (Bloomberg) -- Philippine stocks rose, sending the main index to its biggest gain in a year after Globe Telecom Inc. increased dividend payments and Philippine Long Distance Telephone Co. reported higher income.

SM Investments Corp., the nation's second-biggest company by value, and Bank of the Philippine Islands, the largest local bank by value, also climbed, gaining after central bank Deputy Governor Diwa Guinigundo said a widening gap between U.S. and Philippine benchmark interest rates may attract portfolio investments into the Southeast Asian nation.

``Globe and PLDT show the attraction and resiliency of some Philippine companies amidst a tough inflation environment,'' said Patrick Manaloto, who helps oversee $6.7 billion at BPI Asset Management Inc. in Manila. ``Some expect funds will flow into markets or assets that can provide better returns.''

Globe Telecom climbed the most in a year after the nation's second-biggest mobile-phone services company said it will pay a special dividend. Philippine Long Distance, also known as PLDT, rose to a two-month high after reporting a 13 percent growth in six-month profit and that it will buy 2 million more of its own shares.

The Philippine Stock Exchange Index increased 94.83, or 3.6 percent, to 2,697.21 at the close in Manila, with more than five gainers for each stock that fell on the exchange. It is the sharpest advance since Aug. 21, 2007, for the benchmark, which slumped 25 percent this year on concern record oil prices and a U.S. recession will erode profit and weaken consumer spending.

Globe Telecom climbed 7.9 percent to 1,225 pesos, its biggest gain since Aug. 21, after the company said it will pay 11.6 billion pesos ($265 million) in regular and special dividends next month. PLDT rose 1.8 percent to 2,570 pesos, its highest close since June 3.

SM Investments

SM Investments, which has holdings in banks, shopping malls and property development, added 7.1 percent to 300 pesos, its biggest gain since Aug. 21. Bank of the Philippine Islands, the biggest contributor to the Financials Index's rise, added 6 percent to 44 pesos, its sharpest advance since July 30.

Guinigundo said foreign capital may flow into the Philippines after the U.S. Federal Reserve kept its benchmark interest rate at 2 percent yesterday. The Philippine central bank has raised interest rates twice since June.

``The market's biggest companies and stocks that are most liquid stand to benefit from a stronger inflow of investment funds,'' Manaloto said.

The following stocks rose in the stock market today. Stocks symbols are in brackets after company names.

Builders: Ayala Land Inc. (ALI PM), the largest local builder, added 50 centavos, or 4.9 percent, to 10.75 pesos, its sharpest advance since May 14 on speculation inflation will cool and ease pressure for the central bank to raise interest rates after oil fell to a three-month low.

Shang Properties Inc. (SHNG PM), which has investments in real estate including the Shangri-La Hotel and Plaza Mall in Manila, jumped 40 centavos, or 29 percent, to 1.76 pesos, the second-biggest gainer by percentage in the stock market today. SM Prime Holdings Inc. (SMPH PM), the nation's largest shopping mall builder, climbed 60 centavos, or 8.2 percent, to 7.90 pesos, the most since October 2007.

Ayala Corp. (AC PM), which owns 30.5 percent of Globe Telecom, gained 17.50 pesos, or 5.9 percent, to 315 pesos, a two- month high on expectation that dividend payments from its mobile phone unit will boost earnings. Ayala will get a 3.53 billion peso dividend from Globe next month.

First Gen Corp. (FGEN PM), the nation's biggest non-state power producer, added 2 pesos, or 7.1 percent, to 30 pesos, its highest close since June 18, on speculation a stronger peso will make it easier to pay its overseas debt. The peso rose to a two- month high earlier today.

Philex Mining Corp. (PX PM), the nation's largest metal producer by value, gained 20 centavos, or 2.9 percent, to 7 pesos, its first advance in seven days. The company said it has been authorized by its board to buy back another 10 percent of its own shares. The number of Philex shares that traded today were more than twice the six-month daily average.

To contact the reporter on this story: Ian C. Sayson in Manila at isayson@bloomberg.net.