Local stocks fall in worldwide meltdown

Local share prices tumbled 7.92 percent yesterday in a sharp reaction to falling Asian markets and the sharpest fall in Wall Street since Sept. 11, 2001, with the key Manila index ending at its lowest level in six weeks. Dealers said investors were rattled by the sell-off on Wall Street overnight that followed a sharp fall on the Shanghai market Tuesday on concerns that prices were over-inflated. The rest of Asian markets from Tokyo, Sydney, Mumbai and Hong Kong fell sharply. But Chinese stock markets bounced back slightly yesterday The key Manila index fell 263.84 points to 3,067.45. It was the weakest close for the main index since January 17, when it settled at 3,041.56. The broader all-share index fell 152.27 points or 7.1 percent to 1,983.30. Losers overwhelmed gainers 159 to four, while six stocks were unchanged. Volume turnover reached 23.2 billion shares valued at R12.6 billion. "The selloffs on the US and China markets have caused worldwide jitters. This is definitely a good reality check and for the Philippine market, it’s the major correction that we have been waiting for," said Astro del Castillo at First Grade Holdings Inc. Analysts said the Philippine economy remains stable and the drop could be a good chance for fund managers to start accumulating stocks before any upward correction. "The country’s economic fundamentals are solid because of the appropriate policies set by the government," said Ron Rodrigo, research head at Unicapital Securities. "Investors are jittery all over the place," said Francisco Liboro, president of PCCI Securities, saying Tuesday’s sell-off in China had triggered a chain reaction around the world. "We don’t know how steep this slide will go ... how long the panic will last. But clearly at these levels there is some good buying opportunities," Liboro said. Francis Lim, PSE president and chief executive officer assured the public that the market’s fundamentals remain strong. "I understand from government statistics that the country’s output of goods and services, as tracked by its gross domestic product (GDP), are expected to further grow. Prices of goods and services, along with interest rates, remain stable; and exports continue to grow." "All these favorable factors remain intact, and they will help companies, especially the listed corporations, improve their overall profitability and attractiveness to investors. In fact, some listed companies that belong to the PSEi basket of issues, have already disclosed to the Exchange the results of their operations last year; and the numbers look impressive. The income in 2006 of index companies that have so far submitted partial unaudited financial reports went up on average by 27 percent from their level in 2005," he said.

 

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