Govt instability continues to spook market

Business Mirror
January 20, 2006
http://www.businessmirror.com.ph/2006/0120/20%20cos%20govtinstability.php

Govt instability continues to spook market

THE Philippine stock index posted its biggest two-day decline in a month after four military officers who participated in a mutiny to try to oust President Gloria Macapagal- Arroyo in 2003 bolted from jail. Ayala Corp. and San Miguel Corp. led the decline.

The four soldiers, who escaped on January 17, issued a statement Thursday saying they are part of a bigger group in the military who want to end corruption in government. Justice Secretary Raul Gonzalez said the escape may be part of a plot against the government, ABS-CBN News Channel reported.

"Some investors are getting jittery because of the noise created by this development," said Mark Canizares, an analyst at CitisecOnline. "Events like these are encouraging some investors to take their profits."

The Philippine Stock Exchange Composite Index fell 16.37, or 0.8 percent, to 2,109.08 at the noon close in Manila , extending Wednesday's 1.3-percent decline. The index had its biggest two-day decline since a 2.3-percent slump on December 18 and 19.

The 2003 mutiny, which involved about 300 soldiers, was one of a series of challenges Mrs. Arroyo has faced since she took power in 2001 following a civilian-military revolt against then President Joseph Estrada.

San Miguel Corp.'s Class A shares, equity in the nation's largest food and drinks company which are reserved for Filipinos, fell 50 centavos, or 0.8 percent, to P63.50, its lowest since July 21. Equitable PCI Bank, its third-largest lender by asset, fell P2.50, or 3.9 percent, to P62, its biggest decline since October 4.

Ayala Corp., owner of the nation's largest property developer, biggest bank by market value and its second-biggest mobile-phone company, fell P2.50, or 0.8 percent, to P325.

The Philippine index, Southeast Asia's second-biggest gainer in 2005 with a 15-percent gain, is the only decliner among the major stock benchmarks in Asia as of 12:16 p.m. local time. Wednesday's decline pared the index's gain this year to 0.6 percent.

The International Container Terminal Services Inc. retreated after climbing 15 percent in two days on speculation a bidding war for Peninsular & Oriental Steam Navigation Co. will boost other port operators.

ICTSI, the nation's largest non-government owned port operator, fell 25 centavos, or 2.1 percent, to P11.50. The stock on Wednesday climbed to a record on speculation that Singapore's PSA International Pte. and DP World of Dubai's competing bids for P&O will boost the value of other port operators.

Metropolitan Bank & Trust Co., the nation's largest lender by assets, fell P1, or 3.1 percent, to P31, bringing this week's decline to 7.5 percent.

"The postponement of the sale is adding to the negative sentiment in the market,'' said Jerome Gonzalez, who helps manage $15 million at Manila's PhilEquity Fund.

Shares worth P752 million (US$14.2 million) were traded, 30- percent less the six-month daily average and the smallest in more than two weeks. Losers edged gainers, 47 to 27, with 57 unchanged. Bloomberg