RP shares plunge on US rate rise concerns

PHILIPPINE shares plunged 4 percent Tuesday amid fears that possible increases in US interest rates may push domestic monetary officials to tighten policy.
       The benchmark 30-company Philippine Stock Exchange Index fell 93.62 points—the biggest one-day point drop since 1999—to close at 2,264.36, its lowest in a month.
       The market also was spooked by the congressional oversight committee’s decision Monday to endorse a resolution seeking to cancel licenses granted by regulators in December to four telecommunications companies to provide third-generation, or 3G, cellular services.
       The resolution still needs to be approved by at least a majority of the House of Representatives.
       Among decliners, blue chip Philippine Long Distance Telephone Co. (PLDT), the most actively traded stock, lost 3 percent to P1,960, in step with the 2.8-percent loss suffered by the company’s American depositary receipts in New York Monday and as a knee-jerk reaction to worries the company may lose its 3G license.
       Other active stocks included Globe Telecom, which lost 8.2 percent at P840, and Digitel, off 9.7 percent at P1.12. Both companies, along with PLDT, were given 3G licenses by the government.
       Profit taking dragged down Ayala Corp., lower by 7.7 percent at P392.50, its unit Ayala Land, down 5.6 percent at P12.75 and Philex Mining B, which gave up 13 percent to end at P3.75.
       Comments by senior Bangko Sentral ng Pilipinas officials that domestic interest rates were too low may have also contributed to the market sell-off, said AB Capital Securities research director Jose Vistan.
       “The central bank’s view that local rates are too low may have hurt the peso and that is also being used as an excuse to sell down stocks,” said Vistan. AP