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PHL shares to decline further, analysts say


The market will continue to weaken in the coming sessions, even though most listed companies have already released corporate results for the third quarter, according to analysts’ reports this weekend. “The end of the earnings season could mean lack of strong leads that could help the market reverse its current decline," broker AB Capital Securities Inc. said in its weekly advisory to investors. AB Capital said investors’ sentiments have “turned so negative" that even the disclosure of strong corporate earnings have “failed to stem the tide." On Friday, the Philippine Stock Exchange fell week-on-week by 6.25 percent to 4,076.68 on risk aversion woes in Euroland, particularly in Ireland, said Banco de Oro Unibank Inc. chief market strategist Jonathan Ravelas. “This caused investors to capitalize on their gains from the previous rallies of the market, ignoring positive third-quarter corporate growth numbers," Ravelas said in the bank's weekly report. But Standard & Poor’s upgrade of the Philippines’ debt rating Friday may prompt foreign investors to buy local shares, he said. AB Capital, on the other hand, said that that the market will eventually weather the storm and retest the all-time high levels. But it may take awhile before the market recovers from the “psychological and emotional shock" of the unexpected sell off last week, it said. “Come to think of it, we shouldn’t really be surprised that we had the massive correction. The market surged this year with little or no healthy pullbacks to accompany it. This resulted to excesses that needs to be shed off and crammed into massive sell offs, which have the unfortunate psychological repercussions," AB Capital said. The sell off in the domestic market may have been triggered by US-based Morgan Stanley’s suggestion to investors to start reducing holdings in Southeast Asian stocks, it said. Financial institution Morgan Stanley said foreign fund managers should switch to cheaper markets like South Korea and China, since these countries have low earnings volatility and relatively contained inflation. “A brewing concern on the external front is also contributing to the selling pressures on the market," AB Capital added. Investors are jittery amid worries that Ireland may need a bailout similar to what Greece had. Analysts are predicting that bailing out Ireland could cost as much as 50 billion euros. — VS, GMANews.TV

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