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THE
stock market’s first day of trading this week went
bloody, as most investors were on a selling spree for
fear of further losses due to the lingering
uncertainties in the US financial markets.
The
30-company PSE Index plunged 109.96, or 4.1555 percent,
to 2,536.16, while the all-share index dropped 52.29
points, or 3.1742 percent, to 1,595.05.
Data
released by the Philippine Stock Exchange (PSE)
indicated that Monday’s decline was the largest decrease
the main index had suffered since January 23, 2008, when
the market fell by 5.52 percent. Monday’s performance
was also the lowest since July 30, 2008, when it ended
at 2,583.83.
Losers
overpowered gainers 92 to 11, while 33 stocks were
unchanged. Volume traded reached 2.02 billion, valued at
P1.91 billion.
“The
market was pulled down by the sharp drop in the futures
market in the US of over 3 percent as of lunch, time.
This was due to the possibility of Lehman Brothers going
bankrupt. There is also a concern that the other
financial institutions will follow suit,” Dino Bate,
president of online brokerage firm CitisecOnline.com,
told the BusinessMirror in an interview.
“We
think, technically, in the coming weeks the index will
retest the recent low at 2,368,” he added.
Jonathan
Ravelas, vice president and head for economic research
at BDO, attributed the local stock prices’ decline to
the current landscape of the Wall Street.
“There
are really huge concerns over the impending collapse of
Lehman. Now we are seeing the domino effect stemming
from the housing mortgage crisis in 2007 down to the US
financial sector,” he said in another interview.
Lehman
Brothers already filed for bankruptcy protection but the
Chapter 11 filing does not include its broker-dealer
operations and other units, including Neuberger Berman.
The
global investment bank’s filing for bankruptcy reflects
its inability to survive the global credit crunch. For
the past weeks, investors have been worried of Lehman’s
$46 billion of mortgages and asset-backed securities,
and began to doubt its competence to raise capital.
Ravelas
said moving forward, he sees investors staying away from
the market until some “good stories” arise.
“Expect
risk aversion and investors staying at the sidelines.
That is a natural reaction in a time like this,” he
said. |
