Philippine share prices drop following deficit news

Local share prices continued their slide on Tuesday following news that continued revenue weakness and instability from this year's elections will lead the government to overshoot this year's budget deficit target. The Philippine Stock Exchange index went down by 0.7 percent or 21.73 points to 3,084.57, while the all-share index lost 0.54 percent or 10.45 points to 1,932.23. "We have expected the same market activity for the local market since the Asian and US markets both went down last week," Banco De Oro Securities Corp. analyst Jasper Jimenez said in an interview. But the stock market, he added, would likely go up this week, even as investors remain cautious and continue hunting for bargains. Wall Street dropped on Friday due to concerns that rising credit card losses at JPMorgan Chase & Co. extended to other big banks. US markets were closed on Monday for the Martin Luther King, Jr. holiday. On the local front, trading volume reached 1.15 billion stocks worth P3.27 billion. Losers beat gainers 61 to 28, while 72 stocks were unchanged. Four of the six subindices declined, led by a 2-percent drop in financial companies to 661.79. Property companies also slid by 1.39% or 14.95 points to 1,058.7, while mining and oil stocks dropped by 1.12% or 117.58 points to 10,358.78. The services index likewise fell by 0.51% or 7.9 points to 1,549.71. The industrial index bucked the trend, rising by 0.23 percent or 10.72 points to 4,751.54, as did holding firms, which gained 0.13% or 2.13 points to 1,635.75. Latest estimates by HSBC and think tank GlobalSource put the 2010 shortfall beyond the programmed cap of P293 billion, even if the economy will likely recover better than the official forecast. The British bank forecast a deficit of over P370 billion this year, considerably bigger than last year. For its part, US-based GlobalSource said this year's fiscal gap would likely hit 3.8 percent of economic output, or P316 billion. Despite the gain among holding firms, Tuesday’s top loser was Manchester International Holdings Unlimited Corp., which lost 13.75% to close at P1.38. Shares of holding firms Unioil Resources & Holdings Company, Inc.; Polar Property Holdings Corp.; and Ever-Gotesco Resources & Holdings, Inc. also dropped. Tuesday’s top gainer, realty firm Jolliville Holdings Corp., shot up by half to P2.40, while top two winner Bogo Medellin Milling Company grew by almost a third to to P89. — Nikka A. Corsino, GMANews.TV