RP shares fall to lowest in more than 4 years

MANILA, Philippines - Philippine share prices took a heavy beating on Monday, with the main index plunging to its lowest in more than four years as investors fled emerging markets on global recession fears, analysts said. The 30-company Philippine Stock Exchange (PSE) index declined 239.66 points or 12.27 percent to 1,713.83 while the all-share index dropped 122.79 points to 1,138.07. Data from the PSE showed that Monday’s close was the lowest since September 20, 2004 as the 12.2683-percent decline was the biggest one day percentage drop and also the biggest one-day point drop after February 28, 2007 when the local bourse lost 263.84 points. All the stock market’s sub-indices lost at least 8 percent each, led by the services sector which shed 13.246 percent, followed by the holding firms, 10.6896 percent; and financials, 10.5206 percent. Of the 141 traded issues for the day, 123 declined, while five advanced and 13 stocks were unchanged. Volume traded reached P1.102 billion valued at about P1.6 billion. Monday’s sharp decline forced the PSE to impose a 15-minute trading suspension between 11:23 a.m. and 11:38 a.m. as the market saw shares falling by more than 10 percent. For the first time in its 81-year existence, the stock exchange regulator was prompted to halt trading and impose the “circuit breaker" rule in a bid to calm the frantic sell-off in the bourse, Francis Ed. Lim, PSE president and chief executive officer, said. Peter Raymond Lee, IGC analyst, said investors were dumping emerging markets in favor of “raising cash." "Asian markets led the decline today mostly on fears that the recession is spreading on emerging markets. We may be one of the smallest markets, but we are still vulnerable," he said. Next: Lender's report gives investors another reason to be nervous Lender's report gives investors another reason to be nervous Lee also cited the earnings report of Sy-controlled Banco de Oro Unibank Inc., the second-largest bank in the country, as another reason for investors to be nervous about locally-listed companies. In a disclosure, the lender said it suffered P1.3 billion in losses for the third quarter owing to its exposure to the collapsed investment bank Lehman Brothers. BDO shares plunged 24 percent to P22.50, its lowest in a year. During Monday’s trading, net foreign selling reached P420.44 million as total foreign selling was at P830.36 million. Total foreign buying was at P409.92 million. Astro del Castillo, managing director at First Grade Holdings, noted that investors’ sentiment was “really bad." “This is a marathon, looking for a cure. No one can stop this fall," he said. Until investors are convinced that the global economy is on its way to recovery, local stocks will be “on a roller-coaster ride with a downward bias," del Castillo said. Lee, however, said he expects a recovery soon following the “exaggerated" decline on Monday. “I will not be surprised if we see a rally soon," he said. Telecommunications giant Philippine Long Distance Telephone Co. slid P305 or 14.1531 percent to P1,850. Property giant Ayala Land Inc. plummeted P0.50 or 8.6207 percent to P5.30 while parent firm Ayala Corp. dipped P27 or 11.8943 percent to P200. Bank of the Philippine Islands, Ayala’s banking arm, plummeted P4 or 10 percent to P36. Retail giant SM Prime Holdings Inc. tumbled P0.70 or 9.7222 percent to P6.50. - GMANews.TV