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THE
Philippine stock market continued its vulnerability and
followed the downward direction of markets abroad,
shedding off 116.45 points or 4.8 percent to 2,307.74 at
the end of Wednesday’s trading.
There
were 14 gainers compared with 113 losers with 21
unchanged. Turnover totaled 2.408 billion shares valued
at P2.372 billion ($49.8 million).
Blue
chips PLDT dropped 4.02 percent to P2,505, while Ayala
Land fell 3.65 percent to P7.90. San Miguel Corp. A
shares declined 4.8 percent to P49.50 while its B shares
plunged 4.7 percent to P50.50.
“The
market declined as investors’ worries escalated that the
current tools at hand are not enough for a global
economic recovery,” said Ron Rodrigo, DBP Daiwa head for
research, in an interview.
He said
investors are unloading in a bid for capital
preservation, as hurdles are seen to remain in the
financial market particularly with the financial
companies.
“However, our fundamentals remain solid [enough to]
weather the current market conditions. In our view,
investors, especially these long-term with 12-months
horizon, may find the current levels as an opportunity
to accumulate as the market drops,” added Rodrigo.
The
benchmark PSE index has lost over 300 points in the past
four trading days alone, averaging 75 points a day.
“Investors were spooked over concerns that the super
rescue package recently approved by the US government
will not do much good. There is the possibility that the
companies being infused with cash as Treasury buys toxic
assets will hoard the cash instead of the desired result
of unfreezing credit lines,” commented Prince Yeung of
AB Capital Securities.
Central
banks all over the world, led by the Federal Reserve of
the United States, are under pressure to do all that
they can in order to calm worldwide fear and panic. The
Fed stepped into the corporate debt market by
establishing a new commercial paper facility that would
buy short-term, highly rated debt.
European
leaders, meanwhile, have yet to come together to
announce a coordinated effort against the current
crisis. Britain, for its part, is preparing a rescue
package for its banking system. Meanwhile, other
European countries have been insuring local deposits.
Alejandro Yu of R.S. Lim and Co. Inc. said the
performance of the Dow in the coming days would be
crucial.
“If
there’s further weakening, there would definitely be
further selling. If that happens, the PSEi might test
the 2,250 level,” he said in another interview.
He said
investors from around the world acknowledged the
statement made by US Fed Reserve chairman Ben Bernanke
that “the recession is officially in.”
What
concerns Yu is that if the current situation is
prolonged, companies may stop expanding, or worse,
downsize their operations.
“One
sector that may be affected is the BPO [business-process
outsourcing] our bread and butter next to OFW [overseas
Filipino workers] remittances,” Yu explained. |
