RP stocks tumble, mirror Wall Street’s poor show

Local share prices tumbled on the first trading day of the month, largely swayed by Wall Street's disappointing performance last Friday as investors questioned the US economy's ability to sustain growth. The Philippine Stock Exchange index plummeted by 2.37 percent or 69.98 points to 2,883.21, in a sell-off where almost P7 billion worth of stocks were traded. Subindices dropped across the board. It was the lowest close in three months and the biggest percentage decline in five-and-a-half months. "The US economy is still unstable right now because investors are quite disappointed with the status of the banking industry," analyst Emmanuel Soller of Equitiworld Securities, Inc. said in an interview. Soller noted that stocks usually perform well in January and February, but local equities have been suffering because of jitters on Wall Street. Most of the fund managers that invest in local stocks are Americans, he pointed out. The composite index has lost 6 percent or 169.47 points so far this year, tracking the Dow Jones industrial average's disappointing January performance. Brokerage 2TradeAsia said investors might adopt another indecisive stance early this week due to the weakness of the Dow Jones industrial average, which fell by 53 points on Friday to close January with a loss of 3.4 percent to 10,067.33. Just 10 days earlier, the average reached a 15-month high. Investors who are increasingly uneasy about the US economy, earnings and politics have been pulling money out of the market over the past week. 2TradeAsia said investors were also waiting for the release of January inflation data, as well as subsequent validation moves from the central bank in controlling money supply. "We can't say for sure when local stocks will start recovering. Once the US market stabilizes, the Philippine Stock exchange will follow suit," Equitiworld Securities' Soller said. He noted that local share prices have become underpriced due to the continued decline. On Monday, losers hammered gainers 103 to 15, while 40 stocks were unchanged. Volume reached 2.07 billion stocks worth P6.96 billion. The all-share index also dove by 1.97 percent or 37.1 points to finish at 1,848.39. All subindices declined, led by holding firms' 2.71-percent or 42.9-point drop, followed by service stocks, which slid by 2.62 percent or 39.73 points to 1,475.45. Industrial companies also went down by 2.32 percent or 102.22 points to 4,295.05, while financial shares slipped by 2.28 percent or 14.43 points to 619.2. Mining and oil firms were likewise down by 1.93 percent or 190.85 points to 9,719.21, while property companies lost 0.99 percent or 9.95 points to 992.85. Information Capital Technology Ventures, Inc. was the day's biggest loser, dropping by a fifth to close at 80 centavos. Manila Jockey Club, Inc. also lost more than a tenth to P2.60, while food maker RFM Corporation, which announced a 49-percent hike in net income last year, slid by 9 percent to 52 centavos. Miner Oriental Peninsula Resources Group, Inc. was the day's biggest gainer, adding 15 percent to finish at 86 centavos. Among the most active stocks, dominant carrier Philippine Long Distance Telephone Co. lost 3 percent or P85 to P2,585, while Ayala Corp. was down by 4 percent or P12.50 to P277.50. Ayala-led Bank of The Philippine Islands also slipped by 2 percent or a peso to P44.50, while SM Investments Corp. lost 2 percent or P7.50 to P310. Another Ayala-led firm, Globe Telecom, Inc., bucked the trend, gaining 0.5 percent or P5 to P920, while MRC Allied Industries, Inc. was up by 7 percent or six centavos to 79 centavos. Norman P. Aquino, GMANews.TV