Markets to weather political tension from NBN mess - analysts

MANILA, Philippines- Local market analysts are betting that the interfaith rally scheduled for late Friday, and the ongoing political unease from allegations of high-level corruption in public procurement will have little effect on stock prices and the economy as a whole. Astro del Castillo, First Grade Holdings managing director, told GMANews.TV that the slight uptick in the stock market earlier Friday was a vote of confidence on the local bourse. The gain happened only hours before the start of a rally to pressure President Gloria Macapagal Arroyo into resigning. The president and her husband have been linked to the allegedly anomalous $329.48-million national broadband network deal with ZTE Corp. of China. Friday's gain also occurred despite Wall Street's overnight slump. “We’re happy to note that investors are focused on the opportunities available to them in our bourse. It is a surprise, actually. Investors were optimistic and they seemed to think that nerves will be calmer next week," del Castillo said. Roberto Juanchito Dispo, executive vice president of First Metro Investment Corp., agreed. “The market and the economy will withstand all the political problems that we have," Dispo told reporters on the sidelines of a joint seminar by the Philippine Stock Exchange and the Chamber of Mines in Makati City on Friday. Lawrence de Leon, Accord Capital trader, said that although he felt that players still “traded with caution," the increase in the buying activity in the last 30 minutes of the session showed that they believe that the rally will be peaceful. However, Sergio Ortiz-Luis, president of the Philippine Exporters Confederation, said the failure of the local market in the previous days to take advantage of the recoveries posted by Wall Street and other regional markets showed that the political tension and even the rally will have an “effect" to the market and the economy. He added that the Philippines is competing with other developing countries, particularly in the Southeast Asian Region, of foreign direct investments and any political tension puts a black mark against the attractiveness of the country as an investment destination. “I know that there are some in the business process outsourcing and electronic sectors which have put on hold their expansion plans until further development in our political landscape," he said. - Cheryl Arcibal, GMANews.TV