RP stock market loses P253B in just a single trading session

MANILA, Philippines - The historic plunge of the Philippine stock market on Monday prompted the bourse’s market capitalization to lose P252.6 billion in value in just a single trading day. Monday’s steep fall pushed total losses to P1.76 trillion since the start of the month, data from the Philippine Stock Exchange (PSE) indicated. As of Monday’s trading close, market capitalization was about 27 percent lower than the end of September’s, a difference of about P6.51 trillion. “As it is, our market is already one of the smaller markets in the world and with the drop today, our value has further diminished," Claire Quiray, Accord Capital Equities analyst, said. She also noted that the local bourse was the second worst performer in the region for Monday, following Hong Kong’s 12.7-percent plunge. The PSE’s main index has shed 239.66 points or 12.27 percent at 1,713, a four-year and one month low. Besides being the biggest one-day percentage drop in the stock exchange’s history, it was also the biggest one-day point drop after February 28, 2007 when the local bourse lost 263.84 points. In a separate telephone interview, Francis Lim, PSE president and chief executive officer, said the market capitalization losses were a “necessary result" of the PSE’s huge decline on Monday. “It is the peso equivalent of the stock market’s decline today. But we hope that with what the foreign governments are doing, the decrease in the stock market index will slow down. The local market has been tracking global markets," he said. Lim also called on the government to expedite reforms to develop the capital markets in the Philippines to provide some cushion against global volatility. Next: Bourse official seeks permanent exemptions for stock market transactions Bourse official seeks permanent exemptions for stock market transactions He asked the Philippine Congress to approve a bill to permanently exempt stock market transactions from documentary stamp tax, imposed by the Bangko Sentral ng Pilipinas. The temporary exemption on the PSE will expire in March 2009. Lim also said the government must study the possibility of reducing taxes imposed on transactions from its present 0.5 percent to 0.4 percent or even 0.25 percent on the total transaction value. He likewise cited the Real Estate Investment Trust (REIT) bill. If approved, the bill will create a new product aimed at allowing retail and corporate investors to own stakes in real estate and real estate-related assets which are traded like stocks. Besides seeking the approval of these measures, Lim said Filipinos must also be educated about investment opportunities in the local bourse. “On the administrative side, we are pushing for market education. We must get the locals to be more active in the market," he said. Earlier, the PSE chief revealed that only 0.4 percent of the country’s 90 million population invest in equities. “There’s thin local support for our stock market. So now, when there’s a sell-down in the global markets, we suffer along with them," he said. 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. - GMANews.TV