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PHILIPPINE stocks rose for the first time in three days
after former President Joseph Estrada was convicted of
plunder, easing concern his supporters would have used
an acquittal to challenge the government’s authority.
The
benchmark PSE index closed 39.63 points higher at
Wednesday’s trading to 3,307.60 which, according to
experts, was a clear indication of resiliency amidst the
political drama brought by Estrada’s conviction.
Former
stock exchange chairperson Vivian Yuchengco told
BusinessMirror the decision will bring a very positive
impact on business and boost foreign investors’
confidence.
“It
showed that we are not a banana republic. We have
arrived. Perhaps our nation can learn from this
conviction that nobody is above the law,” she said.
The
conviction also “eased lingering fears the government’s
legitimacy will be questioned had he been acquitted,”
added Patrick Manaloto at BPI Asset Management Inc. “A
pardon will improve the situation further because that
will leave no further reason for violent street
protests.”
The peso
also rebounded from a four-month low, the best performer
of the 10 most-actively traded currencies in
Asia outside
Japan
after the anti-graft court sentenced Estrada to life
imprisonment. The local currency fell the most in almost
a month Tuesday on speculation street protests would
follow the verdict and stall the government’s economic
program.
“While
the market was expecting a guilty verdict, we needed to
hear it,” said Yvette Marquez at BPI Asset Management.
Estrada’s acquittal would have led his supporters “to
push for the continuance of his term and create
instability.”
The peso
advanced 0.9 percent to 46.71 per dollar as of the 4
p.m. end of trading, according to Tullett Prebon
Plc.
For his
part, PCCI Securities president Francisco Liboro
believes that business will remain focused on the
sustainability of economic and corporate fundamentals as
evidenced by the large attendance in yesterday’s
mid-year economic briefing held by the government.
His
observation was supported by First Metro Investment
Corp. executive vice president Roberto Juanchito Dispo.
“We
observe that over time, the market has somewhat built a
firewall that insulate itself from political problems
and controversies. This is driven mainly be the very
good economic fundamentals. We’ve seen that the market
has matured and therefore can shake off any political
problems,” he said.
Many
were simply relieved. “The market sighed with relief
with the decision,” said Jonathan Ravelas, a strategist
at Banco de Oro-EPCI Bank. “Investors have been
defensive in the past two days partly because they were
waiting for the court’s verdict.”
The peso
plunged 3.5 percent on January 17, 2001, three days
before Estrada was ousted by a popular revolt that
installed President Arroyo.
“After
the verdict came out and the market saw that there seems
to be no problem, people started jumping back” into the
peso, said Roland Avante, treasurer at Chinatrust (Philippines)
Commercial Bank in Manila. “[On Tuesday], the sentiment
was to stay away in case something happens.’’
Now that
the decision has been meted out, AB Capital Securities
sees investors switching their focus to the US economy.
“While
the US bourses were buoyed up by sentiments that the Fed
has no choice but to cut its fund rates, nothing is
certain until September 18. Market volatility will weigh
on the minds of investors as there are those that
quickly lock in on their gains at the hint of a drop in
the market,” it added. |
