Shares close higher in thin trade on Wall Street rebound

MANILA, Philippines – (UPDATE) Shares closed higher Monday, buoyed by positive overseas leads such as Wall Street's rebound on Friday on better-than-expected economic data and oil futures trading below $124 a barrel.

But trading was subdued and turnover thin as investors continued to worry about inflation and the US economy.

"We don't expect to see serious buying in such a very volatile market. Investors are still waiting for the right time to get in," said Nestor Aguila, president of DA Market Securities.

The 30-company composite index closed up 28.09 points or 1.1 percent to 2,540.81. The all-share index rose 13.54 points or 0.9 percent to 1,594.43.

There were 47 advancers and 33 decliners, while 48 were unchanged.

Shares worth P1.7 billion changed hands, leaner than Friday's turnover of P1.9 billion.

Oil rose in Asian trade on Monday in a technical rebound from a seven-week low but remained below $124.

A barrel of US light crude for September delivery rose 46 cents to $123.72, after falling $2.23 on Friday to settle at $123.26 on the New York Mercantile Exchange.

The contract, which hit an all-time peak above $147 on July 11, fell to as low as $122.50 on Friday, the lowest since June 5.

US stocks rose Friday after the Commerce Department reported that orders sent to US factories for big-ticket manufactured goods such as cars, appliances and machinery grew 0.8 percent in June, the strongest gain in four months and well ahead of Wall Street's expectations.

Another Commerce Department report showed new US home sales dropped by a smaller-than-expected 0.6 percent.

The Dow Jones industrial average rose 21.41 or 0.19 percent to 11,370.69 Friday. It fell more than 280 points on Thursday.

Analysts said investors were also reluctant to make big moves ahead of the state-of-the-nation address by President Gloria Arroyo later in the day.

"Investors are not expecting any dramatic policy statements that would shake the market," said Jose Vistan Jr., research director at AB Capital Securities.

"However, if there are more subsidies for the poor, that would be bad for the market. Subsidies would eat up government resources, put pressure on its fiscal position, and it will affect a lot of sectors down the line," he said.

Index leader Philippine Long Distance Telephone Co. rose 1.6 percent to P2,495, tracking the hefty 4.4-percent gain by its American Depositary Receipts on Friday.

Recently battered banks rose led by Metropolitan Bank & Trust Co., which was up 4.4 percent at P36. Banco de Oro Unibank gained 2.6 percent to P40 and Bank of the Philippine Islands advanced 1.2 percent to P41.

Jollibee Foods Corp. fell 4.1 percent to P35.50 following recent gains. The nation's largest fast food chain operator said Monday its wholly owned subsidiary Jollibee Worldwide Pte. Ltd. has signed an agreement to acquire a 12-percent equity interest in US-based Chow Fun Holdings LLC for $950,000.

($1 = P44.00)