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PHILIPPINE stocks tumbled, erasing the key index’s gain
this year, after reports showed that losses on
US
home loans are spreading and a housing slump is
worsening in the world’s biggest economy.
“We’re
feeling the impact of fears a credit crunch will come
about because of the subprime loan problem in the US,”
said Olan Caperina, who helps manage $5 billion of
global assets at BPI Asset Management Inc. “Nobody can
say for certain that this is the lowest of the low
because every day, there are companies coming out
affected or having liquidity problems.”
Philippine Long Distance Telephone Co. and Ayala Corp.
led the declines that extended the main stock measure’s
losing streak to a fifth day, the longest in almost a
year.
The
Philippine Stock Exchange Index lost 188.03, or 6
percent, to 2,942.31 at the close of trading, a
seven-month low. Thursday’s drop is the biggest since a
7.9-percent plunge on February 28 when a sell-off in
China shares triggered a global rout in equities.
PLDT,
the nation’s biggest company by market value, declined
P195, or 7.9 percent, to P2,270. Ayala, the
fifth-largest Philippine company by market value,
dropped P15, or 3.5 percent, to P417.50, its lowest
since December 20.
The
Standard & Poor’s 500 Index fell Wednesday, wiping out
all of its gains this year. Shares of Countrywide
Financial Corp., the biggest mortgage lender in the US,
slumped after Merrill Lynch & Co. said the company could
become insolvent if it’s forced by creditors to sell
assets at depressed prices.
Confidence among US homebuilders fell more than forecast
in August to the lowest in 1991, Washington-based
National Association of Home Builders said Wednesday.
Australia’s
Rams Home Loans Group Ltd. said Thursday that it failed
to refinance A$6.17 billion of short-term US loans as a
credit crunch deepens. Rams said it got A$1 billion in
temporary funding from two of its providers.
The main
Philippine Stock Exchange index, which gained 27 percent
this year up to its record close on July 5, has slumped
13 percent in the last five sessions, erasing about
$11.46 billion from market value. That’s the measure’s
longest losing streak since a five-day slide through
August 25.
“The
market is through with the hoping stage that prices will
hold and bounce back, and has now moved to fear and
panic,” said Jerome Gonzalez, who helps manage $65
million at PhilEquity Management Inc. “A recovery in
sentiment depends a lot on what happens in the US.”
The US
buys about 16 percent of Philippine exports and accounts
for more than half of the funds sent home by Filipinos
working abroad. Those funds, which make up 10 percent of
the economy, finance spending on food, clothes, homes
and mobile phones.
Money
transfers from Filipinos abroad grew 1 percent to $1.12
billion in June, the slowest expansion in more than a
year as fewer people found jobs overseas, the Philippine
central bank said Wednesday.
Ayala
Land Inc., which makes about 30 percent of its home
sales to Filipinos working overseas, declined 50
centavos, or 3.5 percent, to P13.75. Megaworld Corp.,
the country’s second-largest developer by market value,
which sources 20 percent of its home sales from
Filipinos abroad, fell 25 centavos, or 8.1 percent, to
P2.85, rounding a 17 percent, five-day slump.
“We are
staying on the sidelines,” Caperina said. “You can’t
fight this trend. We have increased our position on
fixed income assets.”
Bank of
the Philippine Islands, the country’s largest lender by
market value, and which services one of the largest
volumes of money transfers from Filipinos overseas, lost
P4.50, or 7.6 percent, to P54.50, extending a five-day,
9.2 percent loss. SM Prime Holdings Inc., the largest
Philippine shopping mall operator, fell 50 centavos, or
5 percent, to P9.50, a three-month low.
Shares
worth P4.98 billion were traded, 12-percent less than
the six-month daily average and the biggest in five
days. Losers beat gainers 143 to six, with 13 stocks
unchanged in the broader market.
“This
decline is good in a sense that risk is being repriced,
and that would make people look at fundamentals again,”
said PhilEquity’s Gonzalez. |
