050107: Index tumbles 48 pts on lack of fresh leads

The Philippine Star 05/01/2007

Share prices closed 1.44 percent lower yesterday in a muted session with investors opting to take profits on a lack of fresh leads, dealers said.

They said investors were also exercising caution ahead of the May 14 mid-term elections, which many see as a referendum on President Arroyo’s government.

The composite index dropped 47.65 points to close at the day’s low of 3,270.73 off a high of 3,318.38.

The broader all-share index dropped 22.90 points to 2,078.72.

Losers beat gainers 68 to 35, with 56 stocks unchanged. A total of 4.5 billion shares worth P3.4 billion were traded.

"There is always that uncertainty before and after every election, so we can expect the market to move sideways in the coming weeks and even shortly after that, a consolidation will take place," said Joseph Roxas of Eagle Equities.

Lawrence de Leon of Accord Capital Equities noted that the average value turnover in recent weeks has been declining, although there has been no heavy selling.

"The daily value turnover average is going down, partly because investors are not buying aggressively as the elections are very close," he said.

"Investors are either unwinding positions, while others are reducing their holdings portfolio."

Top-traded Philippine Long Distance Telephone Co. (PLDT) was among the day’s losers, slipping P15 to P2,540 while rival Globe Telecom Inc. fell five to 1,230.

Conglomerate Ayala Corp. shed P15 to P600, while property arm Ayala Land dropped 75 centavos to P17.50.

Food and beverage conglomerate San Miguel Corp.’s A-shares ended down 50 centavos at P64.50, but its B-shares were steady at P73.

Ayala, the fourth-biggest listed company, fell P15, or 2.4 percent, to P600. Its unit Ayala Land Inc. dropped 75 centavos, or 4.1 percent, to P17.50.

Megaworld Corp., one of the country’s two biggest builders of residential and office towers, declined 20 centavos, or 5.8 percent, to P3.25.

Concern by some investors that the government may borrow more than planned to finance its budget deficit also contributed to the decline in stocks.

"It’s a crowding out effect," said Jose Vistan, head of research at AB Capital Securities Inc. in Manila. "If the government borrows too much, the cost of borrowing for companies will go up.’’ — AFP

 

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