MARKETS SHRUG OFF VALENTINE BOMBINGS
MANILA, February 16, 2005 (STAR) By Rica D. Delfinado - The financial markets shrugged off the Valentine’s Day bombings, with the stock market and the peso recovering from sharp losses early yesterday morning.
Bomb attacks the other night by al-Qaeda-linked Abu Sayyaf militants in three cities, including the Makati financial district, left 12 people dead and over 130 injured.
Analysts said the attacks initially scared off investors, but the markets then picked up steadily on the view that the economy remains solid and corporate results should be strong.
At the Philippine Stock Exchange (PSE), the 30-company composite index gained 5.60 points, recovering from sharp early losses, to hit a fresh five-year high of 2,090.10 points. This was the index’s best finish since Jan. 17, 2000, when the main index settled at 2,097.23 points.
At the Philippine Dealing System (PDS), the peso also recouped early losses, settling at 54.695 after falling to a low of 55.050 to the dollar at the start of trading as traders initially turned jittery in reaction to the bomb blasts.
Yesterday’s close, however, was 13.50 centavos lower than Monday’s close of 54.560 to $1.
The peso has gained three percent against the dollar this year, making it Asia’s best performing currency.
The attacks "were no big deal to fund managers. Yes, it’s unfortunate but it doesn’t deflect investor optimism on the economy," said Nestor Aguila of DA Market Securities.
The early morning fall was even taken as an opportunity to accumulate more stocks, he added.
"Those who panicked learned a lesson today. Look at the fundamentals. Don’t react on fear," Aguila said.
AB Capital Securities research director Jose Vistan said momentum remained intact despite the overbought condition of most stocks. The recent declines in Treasury bill rates have further boosted interest in equities, he said.
The local business community, however, expressed concern over the series of bombings, which they warned could hamper economic growth.
Leaders of the Employers Confederation of the Philippines (ECOP) and the Philippine Chamber of Commerce and Industries (PCCI) said the bombings could destabilize the economy unless appropriate measures to stop similar incidents are undertaken.
"We’re afraid that this (bombings) will affect the momentum we have attained and we hope this will not continue," ECOP president Rene Soriano said.
For his part, PCCI president Donald Dee called on the National Government to continue the military fight and reconsider efforts to resume peace talks with the Muslim rebels.
"They want the government to stop the fight, but they are doing it the wrong way by killing innocent people. We can’t talk to people with this kind of mind," Dee said.
Yesterday’s transaction volume at the PSE reached 6.36 billion shares worth P2.08 billion after 4.25 billion shares worth P1.89 billion on Monday. The broader all-shares index ended up 2.10 points at 1,207.80. Gainers led losers 79 to 40, with 36 stocks unchanged.
At the PDS, the peso opened weak at 55 before hitting a high of 54.625 and a low 55.050 to the dollar.
"It’s because of the bomb blasts but it should be a short-term phenomenon," said Sani Hamid, a currency analyst at 4CAST Ltd. in Singapore, referring to the plunge in the peso in early trading.
Trading at the PDS was heavy with total turnover reaching $331.50 million from Monday’s $326.67 million.
Philippine Long Distance Telephone Co. was the most actively traded stock, down P5 at P1,430. Metro Pacific was second most active, up four centavos 61 centavos.
First Philippine Holdings gained 50 centavos to P50 while Metropolitan Bank and Trust Co. rose P1 to P37 and Benpres Holdings Corp. was up eight centavos at P1.26.
Ayala Corp. was down 10 centavos at P8.60, while unit Ayala Land Inc. gained 10 centavos at P9.80 after strong results. – With Mayen Jaymalin
Reported by: Sol Jose Vanzi
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