Philippines shares plunge

Philippines share prices closed 4.54 percent lower on Monday after uncertainty in world-wide equity markets sparked another round of broad-based selling, dealers said. They said Manila tracked the weakness in global markets after Wall Street tumbled again Friday following a selloff triggered by worries over the US and Chinese economies.
The composite index slumped 142.46 points to settle at 2,997.88, its lowest level in nearly two months. It moved between 2,972.97 and 3,100.34. The broader all-share index plunged 91.48 points to 1,925.32. Losers whipped gainers 145 to six, while nine stocks were unchanged. A total of 9.5 billion shares worth 5.2 billion pesos (106.45 million dollars) changed hands.
"The market's consolidation, I think, is overdone," said Joseph Roxas of Eagle Equities. "It shows the market is very volatile considering that we are not heavily traded compared to other equities in the region." Ron Rodrigo of Unicapital Securities believes however that the shaky ride is temporary and the long-term outlook for the Philippine market is still bullish.
"We have been waiting for this consolidation for sometime now as most issues are already overvalued," he said, adding the market is now in a better position to endure shocks because of the country's stronger economic fundamentals.
"There is nothing to be seriously worried about yet. We are better off now compared to the previous doldrums in the market after the 1997 Asian financial crisis, and after the (Joseph) Estrada administration collapsed," he said.
Despite the market's recent sharp losses, Rodrigo believes it has not turned into a bear market although there are indications that some nervous investors have temporarily shifted to less risky fixed-income instruments after Wall Street skidded last week.
Among the day's heavy losers include Philippine Long Distance Telephone or PLDT which fell 65 pesos to 2,350 and Ayala Corp which shed 15 to 545. Top-traded PNOC-Energy Development Corp lost 40 centavos to 5.50 pesos. San Miguel A shares fell 50 centavos to 63 pesos, while its B shares lost three pesos to 72.