PHILIPPINE stocks on Tuesday fell after the OECD on Monday cut its forecast for growth in the US, the largest market for Philippine exports and biggest source of remittances.
Philippine Long Distance Telephone Co. (PLDT), Ayala Corp. and San Miguel Corp. (SMC) led a drop among the nation’s biggest companies.
“The market is cautious,” said Jonathan Ravelas, strategist at Manila-based Banco de Oro. “Investors are taking advantage of negative sentiment here and abroad to realign their portfolios.”
The Philippine Stock Exchange Index lost 38.42, or 1.4 percent, to 2,779.14 at the noon close in Manila, its lowest since November 8.
PLDT, the nation’s largest phone company, fell P60, or 2.4 percent, to P2,445. Ayala Corp., the nation’s third-biggest company by market value, lost P10, or 2 percent, to P485. SMC’s Class B shares, equity with no ownership restrictions in the country’s largest food and drinks company, lost 50 centavos, or 0.7 percent, to P74.
Tuesday’s drop followed a 1.4-percent loss in the US Standard & Poor’s 500 Index. The Organization for Economic Cooperation and Development cut its forecast for US economic growth to 2.4 percent next year from a previous 3.1-percent estimate.
The US buys almost a fifth of Philippine exports and the Filipinos, who work there account for more than half of the funds sent home by overseas workers. Remittances from overseas workers make up 10 percent of the economy.
International Container Terminal Services Inc., the nation’s largest non-government owned port operator, declined 50 centavos, or 2.5 percent, to P19.25. SM Prime Holdings Inc., the nation’s largest shopping mall operator, fell 20 centavos, or 2 percent, to P9.70.
Tuesday’s loss cut the nation’s main stock index rise this year to 33 percent, the third-largest gainer in Southeast Asia, behind measures in Vietnam and Indonesia. The Philippine Stock Exchange Index gained 17 percent in the third quarter.
“The pullback today may just be what the doctor ordered considering how far share prices have gone up already,” Ravelas said. “The market is a bit stretched.”
Benpres, Meralco
SEPARATELY, Benpres Holdings Corp. fell 2 centavos, or 1.1 percent, to P1.80 after the company said it intends to transfer its 49-percent stake in First Philippine Infrastructure Development Corp. to City Resources Philippines Corp.
Manila Electric Co. fell after its shareholder First Philippine Holdings Corp. said it may combine into one the two share categories of its unit. Class B shares of Meralco fell P1.50, or 1.5 percent, to P33.50. Its Class A shares, which are reserved for Filipinos, declined 50 centavos, or 1.5 percent, to P33.
First Holdings chairman Oscar Lopez said Monday that a combination of Meralco’s shares is being considered because of the narrowing share price difference between the two categories.
First Holdings, which together with Spain’s Union Fenosa SA owns 23-percent of Meralco, fell P2.50, or 4.5 percent, to P53.50.
Shares worth P2.58 billion were traded, 23 percent more than the six-month daily average. Losers outnumbered gainers 86 to 18, with 51 stocks unchanged in the broader market.
Business Mirror
November 29, 2006
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