Thursday, June 08, 2006
Philippine share prices slumped on Wednesday, tracking sharp losses on Wall Street over the past two days in the face of concerns that US interest rates might rise further, dealers said.
They said investors were shaken after US Federal Reserve chairman Ben Bernanke and other senior Fed officials warned that inflation remained a risk and rates could be hiked to contain it even as the economy slowed.
Wall Street sold off as a result and the regional markets suffered accordingly both Tuesday and Wednesday.
The composite index shed 71.38 points to 2,218.42, the worst finish since April 11, when it settled at 2,217.38. The market traded to a low of 2,212.65 and a high of 2,289.80 points.
Volume was 696.4 million shares worth P1.42 billion ($26.84 million).
The broader all-shares index retreated 33.41 points to 1,400.87.
Losers led gainers 85 to 13, with 30 stocks unchanged.
The Philippine peso was at 52.90 to the dollar as of mid-day.
“Just like other emerging markets, the Philippines has been adversely affected by these global worries,” said Harry Liu of Summit Securities.
The sell-off “could be a second wave of portfolio realignment among fund managers” following a similar sell down two weeks ago, said Astro del Castillo of First Grade Holdings Inc.
At the same time, the sharp falls may soon see bargain hunters stepping in, dealers said.
“It’s possible to see a rebound later this week or early next week,” said Liu.
Most active Philippine Long Distance Telephone Co. fell P30 at P1,960.
Conglomerate Ayala Corp., the second most active stock, retreated P27.50 to P370.
Bank of the Philippine Islands fell P3.50 to P50.50 while Metropolitan Bank and Trust Co. shed P1 to P33.50.
San Miguel Corp. A shares were unchanged at P64 while its B shares fell 50 centavos to P71.
Composite index up in first five months
Despite the local bourse’s continued weakness, Francis Lim, PSE president, told reporters that the composite index, the PSEi, grew by nearly a tenth to 2,296.11 points in the first five months of the year from the end-2005 level of 2,096.04 on the back of the strong performance of sector indices.
Net foreign buying during the first five months of the year more than doubled to P25.01 billion or 109.6 percent higher than the P11.93 billion level recorded a year ago, he said.
Lim said the pace of foreign buying, which grew by 34.93 percent, picked up faster than selling, which was recorded at 25.31 percent.
“The slower rate of selling helped us enjoyed P25 billion in net foreign buying, which was more than double the amount recorded in the same five-month period last year. It is also worth noting that net foreign buying from January to May already surpassed the P23.73 billion net foreign buying that the PSE recorded for the whole of 2005,” he said.
By sector, prices of mining and oil stocks took the star turn as they made a 61.75-percent jump to 4,483.25 points at end-May from 2,771.77 points at the end of 2005.
Except for the industrial sector, which declined 7.45 percent, all the other sectors registered double-digit growth rates.
“No less than 253 issues were actively traded from January to May 2006. Of the actively traded stocks, 151 recorded gains, 32 lost value while the prices of 70 stocks did not change,” Lim said.
He also said the trading activity also picked up as evidenced by the expansion in value turnover from P196.47 billion at the end of 2005 to P213.45 billion as of the first five months of the year.
Average daily value turnover was at P2.03 billion from P1.93 billion, translating to a 5.54-percent increase.
“Companies in the telecommunications industry grabbed the biggest slice of daily value turnover for the first five months of the year at P565.6 million, which was 30 percent higher than the P434 million recorded a year earlier. But listed firms in the transportation service and oil business posted the highest increase in average daily value turnover at 911.4 percent and 801 percent, respectively,” Lim said.
Meanwhile, total market capitalization rose by 14.2 percent or from P5.95 trillion at the end of 2005 to P6.8 trillion at the end of May this year.
--AFP and Cheryl M. Arcibal
http://www.manilatimes.net/national/2006/june/08/yehey/business/20060608bus11.html
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