RP stocks fall, dragged by Fitch statement on deficit

Share prices on Tuesday continued their downtrend as players expressed concern over international ratings agency Fitch Ratings' statement that it finds the government's fiscal performance 'disappointing.' The 30-company index lost 31.55 percent or 0.84 percent at 3,706.24 while the all-share index lost 12.81 points or 0.5295 percent to 2,406.57. Ron Rodrigo, Unicapital Securities research chief, said traders reacted particularly to Fitch's pronouncement that the government will overshoot its P63-billion deficit target for the year. "The Fitch statement has an economic effect given that (it says) we're going to overshoot deficit," Rodrigo said. He added that the government might be forced to borrow, which in turn will have pressure in the interest rates. Higher interest rates would also entice investors to shift to fixed income rather than equity markets. "In a way we might see the market testing its support levels, which are 3,700 to 3,650," Rodrigo said. Losers outnumbered gainers 61 to 40 while 70 stocks were unmoved. Volume traded reached 4.81 billion valued at P4.34 billion. Telecommunications giant Philippine Long Distance Telephone Co. shed P30 or 1.12 percent to P2,655. Conglomerate Ayala Corp. dropped P5 or 0.87 percent to P570. Mining exploration company Geograce Resources Philippines Inc. was flat at P2.85. Developer Ayala Land Inc. was unmoved at P18.25. Geothermal power producer PNOC-Energy Development Corp. gained P0.20 or 3.08 percent at P6.70. - Cheryl Arcibal, GMANews.TV