PHILIPPINE shares fell from their highest level in almost 10 years after the government said agricultural production grew slower than expected last year.
SM Prime Holdings Inc., Jollibee Foods Corp. and San Miguel Corp. led decliner.
“The agriculture number is disappointing,” said Rico Gomez, who helps manage about $1 billion at Rizal Commercial Banking Corp. “The recent market buoyancy we have seen is because the government has been meeting its economic targets. Any sign of slippage is a good reason to take profit.”
Manila Electric Co. advanced after its chairman said Spain’s Union Fenosa SA may raise its stake in the power retailer. Bank of the Philippine Islands fell after the lender said it may sell fewer assets this year that were seized from defaulting borrowers.
The Philippine Stock Exchange Index lost 28.73, or 0.9 percent, to 3041.56 at the close in Manila, snapping a three-day, 4.4-percent climb that lifted it Tuesday to its highest close since April 3, 1997. The measure, which has gained 2 percent this year, fell as much as 1.2-percent earlier Wednesday.
SM Prime, the nation’s largest shopping mall operator, fell 25 centavos, or 2.1 percent, to P11.50. San Miguel’s Class B shares—equity with no ownership restrictions in the nation’s largest food and drinks company—declined P2, or 2.6 percent, to P76, its biggest loss since August 2. Jollibee, the nation’s largest fast food company, fell P2, or 4.4 percent, to P43.
Weak farm growth
PHILIPPINE farm output expanded 3.9 percent in 2006, the agriculture ministry said Wednesday. That’s slower than then initial 4-percent growth government predicted earlier this month because of damages caused by typhoons, Finance Secretary Gary Teves said.
“This will have an effect on farm incomes,” Gomez said. “Agriculture, historically, has been supporting the economy’s expansion.”
Agriculture, which accounts for a fifth of the economy, must grow 5 percent for the government to meet its target of expanding gross domestic product at least 6.1 percent this year, Teves said.
Ayala Corp., the nation’s third-largest company by market value, and Aboitiz Equity Ventures Inc. fell after climbing to records. Ayala Land Inc., the nation’s most profitable builder, fell from its highest in more than nine years.
“The market’s three-day rise was too fast,” said James Lago, head of research at Westlink Global Equities in Manila. “It has opened the opportunity for investors to take their gains, which always comes after a sharp rally.”
Ayala, Aboitiz
AYALA Corp. fell P5, or 0.8 percent, to P605, three-day, 12-percent advance that lifted it to its highest ever. Aboitiz Equity, which has investments in transportation, banking and power, declined 10 centavos, or 1.1 percent, to P9.30, snapping a four-day, 24-percent surge. Ayala Land fell 25 centavos, or 1.5 percent, to P16.25, after advancing Tuesday to its highest since July 2, 1997.
Bank of the Philippine Islands, the nation’s most profitable lender, lost P1.50, or 2.2 percent, to P68. Bank president Aurelio Montinola Tuesday, night that the lender will not “rush” the sale of seized assets because of improving property prices.
Manila Electric’s Class A shares—equity reserved for Filipinos in the nation’s largest power retailer, added P1.50, or 2.5 percent, to 61, extending a three-day, 7.2-percent climb. The stock is at its highest since September 12, 2000.
Spanish investor
Union Fenosa may buy more shares in the utility if the Spanish company becomes more comfortable with the nation’s power regulations, according to newspaper reports, citing Manila Electric chairman Manuel Lopez. The Lopez group, which runs Manila Electric, may also bid for the 29-percent stake in the utility the government plans to auction later this year.
“Union Fenosa’s plan to buy more shares in the company will help build investors’ confidence in Manila Electric’s management, Lago said. “It could lead to Union Fenosa taking a more active role in the management of Manila Electric.”
Manila Electric’s Class B shares, which have no ownership restrictions, gained P1, or 1.7 percent, to P61.50, extending a three-day, 9-percent climb. The stock is at its highest since March 12, 2001.
Benpres Holdings Corp., the holding company of Manila Electric shareholder, the Lopez family, rose 5 centavos to P2.95. Bloomberg trimming an earlier gain of as much as 5.2 percent.
Shares worth P4 billion changed hands, 57 percent more than the six-month daily average. Losers beat gainers 58 to 55, with 53 stocks unchanged in the broader market.
Metropolitan Bank & Trust Co., the nation’s largest lender by assets, advanced 50 centavos, or 0.9 percent, to P56.50, rounding a four-day, 8.7 percent gain. The lender’s profit probably reached as much as P5.5 billion last year, President Arthur Ty said Tuesday night. The bank made P3.79 billion in net income in 2005. (Bloomberg)
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