RP stocks plunge to three-year low on recession fears

MANILA, Philippines - Philippine share prices posted a two-year low as overseas markets suffered another heavy blow on fears of a spreading global recession. The 30-company Philippine Stock Exchange index dropped 97.09 points or 4.6388 percent to 1,995.92 while the all-share index slipped 55.78 points or 4.1629 percent to 1,284.16. Thursday’s decline sent the main index to its lowest since September 2005, analysts said. Losers trounced gainers, 117 to 3 while 13 stocks were unchanged. Volume traded reached 1.835 billion valued at P3.112 billion. The sharp overnight decline in Wall Street sent investors to another selling spree, Grace Cerdenia, managing director at online stock brokerage firm 2TradeAsia, said. The Dow Jones industrial average shed 514 points on Wednesday as investors worried that the financial crisis will weaken global demand, leading to lower corporate earnings. "There's still uncertainty," Cerdenia said. “This is a reaction to the sharp overnight decline in Wall Street. Investors are becoming more and more worried that earnings will be slashed by a weakening global demand." After the main index's failure to hold above the 2,000 level, the next support will come in at about 1,970, Cerdenia added. Among the sub-sectors, the Mining & Oil sub-index suffered the worst, declining some 12.7 percent, as gold prices slid $44 to $276 an ounce in the world market. Jose Vistan, AB Capital Securities research chief, said although Philippine financial institutions have a limited exposure to sophisticated derivatives, the country will nevertheless be affected because its export markets—economies such as the US, the UK, and Singapore—have slipped into recession. "These countries and the US are in a recession. These are our trading partners, they hire our overseas contract workers and they invest in the Philippines," he said. Market heavyweights such as telecommunications giant Philippine Long Distance Telephone Co., property giant Ayala Land Inc. and holding company Ayala Corp. led the declines in the local bourse. PLDT, whose major shareholders include Japanese and Hong Kong firms, plunged P110 or P4.793 percent to P2,185. Geothermal power producer PNOC-Energy Development Corp. plummeted P0.15 or 4.6154 percent to P3.10. Ayala Land tumbled P0.50 or 7.8125 percent to P5.90. Ayala Corp. dipped P10 or 4.0816 percent to P235. Holding company Alliance Global Group Inc. dove P0.26 or 11.9266 percent to P1.92. - GMANews.TV