Index hits 7-week low on pending Moody’s ratings move
The Philippine Star 02/09/2006
Shares prices declined sharply yesterday, spooked by news that Moody’s Investors Service was set to issue a credit ratings report on the country that may fall short of market expectations.
The benchmark 30-company Philippine Stock Exchange Index fell 36.46 points, or 1.7 percent, to 2,060.92, its worst finish since Dec. 19, 2005, when it ended at 2,024.70.
Finance Secretary Margarito Teves said during a CNBC interview earlier yesterday that Moody’s will likely issue a report on the Philippines’ sovereign rating that will indicate that the country needs to improve its tax revenue collection before the agency makes any changes.
Ratings agencies revised the Philippines’ credit rating outlook to negative from stable last year.
"I think that is the major reason for the market’s decline today. Everybody was optimistic that credit ratings agencies will change their outlook given recent developments," said First Grade Holdings managing director Astro del Castillo.
He was referring to recent fiscal reforms, including an increase in the value added tax rate to 12 percent from 10 percent.
Blue chip Philippine Long Distance Telephone Co. was the session’s most actively traded stock, retreating 6.2 percent to P1,680, in step with the 6.5-percent loss suffered by the company’s American depositary receipts in New York Tuesday.
Other stocks sold down included Ayala Corp., off 2.3 percent at P325, Pilipino Telephone, lower by 3.1 percent at P3.15, Bank of the Philippine Islands, which fell 0.9 percent to P57.50, and SM Investments, down 0.9 percent at P220.
Decliners led gainers 52 to 22, while 43 stocks were unchanged.
Top-traded PLDT fell P110 to 1,680 with the stock still hurting from Morgan Stanley’s rating downgrade on Tuesday, which triggered a sharp decline in its US shares overnight.
Morgan Stanley said it downgraded its rating for PLDT to "equal weight" because it expects limited positive surprises from the company, given slowing growth in the cellular phones.
"The downgrade on PLDT pulled down other stocks as well," said Lawrence de Leon of Accord Capital Equities Inc.
Dealers said the market had been due for a correction after strong gains in January, that were partly due to an improving outlook on how the government handles its finances.
"What initially was a PLDT concern prompted profit-taking across the board. Everybody is now moving to the sidelines to await fresh compelling leads that might reverse the (downward) trend," said Johnathan Ravelas of Banco de Oro Universal Bank.
Bank of the Philippine Islands fell 50 centavos to P57.50 while parent Ayala Corp. shed P7.50 to close at P325. Ayala Land finished unchanged at P10.75. – AP, AFP
The Philippine Star 02/09/2006
Shares prices declined sharply yesterday, spooked by news that Moody’s Investors Service was set to issue a credit ratings report on the country that may fall short of market expectations.
The benchmark 30-company Philippine Stock Exchange Index fell 36.46 points, or 1.7 percent, to 2,060.92, its worst finish since Dec. 19, 2005, when it ended at 2,024.70.
Finance Secretary Margarito Teves said during a CNBC interview earlier yesterday that Moody’s will likely issue a report on the Philippines’ sovereign rating that will indicate that the country needs to improve its tax revenue collection before the agency makes any changes.
Ratings agencies revised the Philippines’ credit rating outlook to negative from stable last year.
"I think that is the major reason for the market’s decline today. Everybody was optimistic that credit ratings agencies will change their outlook given recent developments," said First Grade Holdings managing director Astro del Castillo.
He was referring to recent fiscal reforms, including an increase in the value added tax rate to 12 percent from 10 percent.
Blue chip Philippine Long Distance Telephone Co. was the session’s most actively traded stock, retreating 6.2 percent to P1,680, in step with the 6.5-percent loss suffered by the company’s American depositary receipts in New York Tuesday.
Other stocks sold down included Ayala Corp., off 2.3 percent at P325, Pilipino Telephone, lower by 3.1 percent at P3.15, Bank of the Philippine Islands, which fell 0.9 percent to P57.50, and SM Investments, down 0.9 percent at P220.
Decliners led gainers 52 to 22, while 43 stocks were unchanged.
Top-traded PLDT fell P110 to 1,680 with the stock still hurting from Morgan Stanley’s rating downgrade on Tuesday, which triggered a sharp decline in its US shares overnight.
Morgan Stanley said it downgraded its rating for PLDT to "equal weight" because it expects limited positive surprises from the company, given slowing growth in the cellular phones.
"The downgrade on PLDT pulled down other stocks as well," said Lawrence de Leon of Accord Capital Equities Inc.
Dealers said the market had been due for a correction after strong gains in January, that were partly due to an improving outlook on how the government handles its finances.
"What initially was a PLDT concern prompted profit-taking across the board. Everybody is now moving to the sidelines to await fresh compelling leads that might reverse the (downward) trend," said Johnathan Ravelas of Banco de Oro Universal Bank.
Bank of the Philippine Islands fell 50 centavos to P57.50 while parent Ayala Corp. shed P7.50 to close at P325. Ayala Land finished unchanged at P10.75. – AP, AFP
No comments:
Post a Comment