Local shares surge on US plan to buy soured debts

MANILA, Philippines - Philippine share prices surged for the second day on Monday after the Bush administration disclosed plans to acquire huge chunks of bad debts from troubled US financial institutions for the next two years. However, analysts warned that the local bourse is “not yet out of the woods," and that the rally was only “reactionary." The 30-company Philippine Stock Exchange index jumped 57.34 points or 2.3283 percent to 2,520.13 while the all-share index rose 31.79 points or 2.0392 percent. Last Friday, the local market surged 4.694 percent after being heavily battered by the jitters caused by distressed assets, leading to the collapse of American investment banks. Gainers dominated losers 73 to 21 while 44 stocks were unchanged. Volume traded reached 1.323 billion valued at P3.099 billion. Astro del Castillo, First Grade Holdings managing director, said the $700-billion rescue plain unveiled by the Bush administration "helped dissipate some fears in the global financial markets." "This bailout is the medicine that the global markets need right now," he said. But del Castillo added that the local bourse "remains shaky" owing to uncertainties in the US financial sector. Harry Liu, Summit Securities president agreed, saying that the rally may only last in the “short- or mid-term." "This rally was just on our oversold condition, more or less. With the US plan to buy bad debts, there's a little bit of support," he said. Telecommunications giant Philippine Long Distance Telephone Co. soared P75 or 2.9412 percent to P2,625. Metropolitan Bank & Trust Co., the country’s second-largest lender in terms of assets, was flat at P34.50. Ayala Corp., the country's largest conglomerate, leaped P10 or 3.5088 percent to P295. Ayala-controlled lender Bank of the Philippine Islands climbed P1 or 2.2727 percent to P45. Geothermal power producer PNOC-Energy Development Corp. went up P0.05 or 1.6393 percent to P3.10. - GMANews.TV