At stock market, worst day in more than 2 weeks

Business Mirror

Feb 25, 2006

At stock market, worst day in more than 2 weeks

THE country's stocks had their worst day in more than two weeks Friday after President Arroyo called a state of emergency to counter moves by her opponents to topple her government. Ayala Land Inc. and Ayala Corp. led the decline.

Mrs. Arroyo said she is giving the military police powers to maintain peace and order as the state arrests and goes after a group planning to establish an "extra-constitutional regime" in the country. The military said earlier yesterday it thwarted a plan by some Army soldiers to join protest rallies demanding Mrs. Arroyo's resignation.

"We are holding off buying right now until things have settled," said John Padilla, who helps manage about $2.8 billion at Metropolitan Bank & Trust Co. "People are worried about political stability, but the market isn't in a state of panic yet. The weekend is coming and we don't know what events will transpire."

The Philippine Stock Exchange Composite Index fell 21.39, or 1 percent, to 2069.93 at the noon close, its biggest decline since February 8. The measure, the region's worst-performing benchmark yesterday, fell as much as 2.1 percent to its lowest since December 19 after Mrs. Arroyo made her announcement.

Ayala Corp., which owns the nation's second-biggest bank by assets, its No. 2 mobile-phone company, and its largest property developer, fell P10, or 3 percent, to P322.50, its biggest decline since December 15. Ayala Land , the nation's largest property developer, fell 25 centavos, or 2.3 percent, to P10.75.

"These stocks are barometers of the market and they have plenty of liquidity, making them susceptible," said Mike Ordinanza, assistant vice president at Bancommerce Investment Corp. "I think a decline will be temporary."

Losers edged gainers, 99 to six, with 26 stocks unchanged. Shares worth P1.54 billion changed hands, 32 percent more than the six-month daily average and the biggest in seven days.

Mrs. Arroyo in 2001 declared a "state of rebellion" to arrest alleged plotters that encouraged protesters to storm the presidential palace, four months after she came to power after a civilian-military revolt. The restrictions lasted for four days. In 1972, Ferdinand Marcos declared martial law and ruled by decree until he was ousted in 1986.

In 2003, she ended in about a day an attempted mutiny of 300 soldiers demanding her resignation.

The President has faced calls for her resignation since June over allegations she rigged the 2004 election and that her family gained from illegal gambling.

Mrs. Arroyo, who denied the charges, stamped out an impeachment move against her after her allies in Congress outvoted her opponents in September by 158 to 51.

Banco de Oro, a lender owned by the nation's richest tycoon Henry Sy, declined P1.50, or 4.4 percent, to P33, its biggest drop since December 19. Globe Telecom Inc., the nation's second-biggest mobile phone company, fell P15, or 1.8 percent, to P840, its biggest decline since January 18.

Limiting the decline in the index, Philippine Long Distance Telephone Co., the nation's largest phone company, added P10, or 0.6 percent, to P1,775.

The company is expected to report that its profit excluding one-off gains climbed 66 percent to P7.98 billion in the fourth quarter, according to the median forecast of five analysts surveyed by Bloomberg. It will release earnings on February 27. Bloomberg, AP