Prices tumble after investors cash in gains

SHARE PRICES closed 2.77% lower yesterday, hurt by weak US sentiment and investors cashing in ahead of the part of the lunar calendar that the Chinese consider unlucky, dealers said.

The benchmark Philippine Stock Exchange index lost 78.83 points to 2,771.18, its lowest level in three weeks, while the all shares index gave up 43 points or 2.38% to 1,763.98.

Turnover reached 3.94 billion shares worth P3.23 billion, with 114 issues down, 16 up and 24 unchanged.

“US consumer confidence was weak, and while Japan’s economy improved, there was still a negative spin to it,” Jose Vistan of AB Capital Securities told Dow Jones Newswires.

He expects further consolidation with the start on Aug. 20 of the so-called Chinese “ghost” month that is usually a slow period for Philippine equities.

Jasper M. Jimenez of BDO Securities said profit taking was evident in the huge discrepancy between losers and gainers.

“That’s [a reflection of] the sentiment now. Some investors were already expecting this last week but the market continued to be resilient,” he said.

He also pointed out that the fall in Wall Street stocks on Friday contributed to yesterday’s turnout. “It was also partly a reaction to the performance of the US market last Friday,” he pointed out.

US stocks closed lower on Friday on a report that consumer confidence fell in August. The Dow Jones industrial average lost 76.79 points to 9,321.40.

Eunika B. Maloles of 2TradeAsia.com said the market’s fall yesterday was expected especially since the mining and oil sector had a steep climb last week.

“There was broad-based profit taking and correction in all sectors led by mining since its run-up was steep last week, she said.

Mr. Jimenez said the bourse may remain at its current levels, with no fresh leads to perk up trading and with August historically a slow time for the market.

“I don’t expect the bourse to move up significantly. The market bias is really negative,” he said.

Ms. Maloles also expects lukewarm participation among investors this week due to the absence of leads and a shorter trading week.

The market will be closed on Friday in observance of martial law-era hero Benigno S. Aquino, Jr.’s death anniversary.

Ms. Maloles, however, noted that the bourse’s steep fall yesterday may prompt a rally within the week.

“The decline yesterday was pretty sharp, so we could expect a rally the next few days… We need this correction though to further push up the market in the medium term,” she said.

Mining and oil companies had the sharpest fall, tumbling 3.52% or 293.69 points to 8,055.42 followed by industrial firms, which dropped by 3.14% or 131.36 to 4,055.46.

Property shares lost 3.02% or 29.96 points to finish at 961.49, while service companies declined by 2.98% or 43.65 points to 1,421.70.

Holding firms dipped by 2.31% or 35.80 to 1,514.73, while financial stocks slipped by 1.82% or 11.06 or 598.23.

Ayala Corp. lost P7.50 or 2.4% to finish at P300, while units Bank of the Philippine Islands and Ayala Land, Inc. finished 50 and 20 centavos lower, respectively, at P45.50 and P9.40.

The country’s largest bank, Sy-led Banco de Oro Unibank, Inc. shed 1.43% or 50 centavos to P34.50, while SM Investments Corp.’s shares dipped by 2.31% or P7.50 to P317.50.

Index heavyweight Philippine Long Distance Telephone Co. lost P75 or 2.95% to end at P2,470.

The Manila Electric Co., on the other hand, shed 3.59% or P8 to close at P215. — AFP and Don Gil K. Carreon

Entry Credit: http://www.bworldonline.com