'MEA CULPA' FAILS TO PERK UP MARKETS
MANILA, June 29, 2005 (STAR) By Rica D. Delfinado - President Arroyo’s televised public apology Monday night for her "lapse in judgment" by talking to an election official over the counting of ballots failed to impress and perk up the local markets yesterday.
It was business as usual in both the Philippine Stock Exchange (PSE) and Philippine Dealing System (PDS). In fact, the PSE composite index shed 8.30 points or 0.2 percent to settle at 1,955 points while the peso lost 18 centavos to close at 55.690 to $1 compared to Monday’s close of 55.51 to $1.
The peso opened weak at 55.65 to the dollar before hitting a low of 55.69 and a high of 55.49 to $1. Dollar trade at the PDS was light with only $204 million changing hands.
The selloff, however, wasn’t as intense as feared, as investors displayed resilience in the face of political jitters spawned by the President’s admission and apology Monday night.
"There was a knee jerk reaction as some investors may have been jolted by Arroyo’s statement last night," said Citiseconline.com investment analyst Mark Alan Canizares. "But I believe the country’s fundamental will reassess themselves after the political storm."
First Grade Holdings managing director Astro del Castillo said the nationwide address is being viewed by some sectors as a step toward ending the controversy.
"Hopefully, the apology will help calm the nerves of the people," said Del Castillo. "But the uncertainty cannot be resolved overnight."
The continuing rise in world oil prices, which is expected to impact on domestic economy, also was a factor, he said.
"The market is actually resilient despite the lingering political uncertainties. We did not see any panic (despite Mrs. Arroyo’s statement)," said Nestor Aguila of DA Market Securities.
"It was more of a continuing technical correction after the market’s rise recently," he remarked.
ING Financial Markets, in a note, said it views the President’s admission as a step forward in diffusing current political tensions.
"We expect politics to fade from view gradually and allow economic fundamentals to reassert their strength on financial asset prices," it said, citing in particular the progress on the government’s fiscal reforms.
Yesterday’s volume transaction at the PSE amounted to 185 million shares worth P966 million. The broader all-shares index fell 4.29 points to 1,187.02 points. Losers led gainers 46 to 24, with 42 stocks unchanged.
Analysts also said financial markets may rebound should Mrs Arroyo’s apology sap support for the opposition, according to Allan Yu, who helps manage $2.8 billion at Metropolitan Bank & Trust Co.
"The opposition will try to use Mrs Arroyo’s statement against her, but this will die down from here," Yu said .
"The opposition will try to use Mrs Arroyo’s statement against her, but this will die down from here," Yu said. "People will forget about this. Her apology takes away the uncertainty and the overhang of political concerns."
Philippine Long Distance Telephone Co. (PLDT), the most actively traded stock rose P5 to P1,640.
Ayala Land was down 30 centavos at P8.10 while parent Ayala Corp fell P5 to P325.
Food and beverage giant San Miguel Corp.’s A shares were steady at P58.50, while its B-shares, available for foreign investors, fell 50 centavos to P94.
Contributing mainly to the market loss was profit-taking in property concern Ayala Land, down 3.6 percent at P8.10, its parent Ayala Corp., off 1.5 percent at P325, and investment holding company First Holdings, lower by 1.1 percent at P46.50.
Limiting the market's loss was continued buying in Philippine Long Distance Telelphone Co., up 0.3 percent at P1,640.
Philippine National Bank rose six percent to P44.50 after the Department of Finance said Monday that businessman Lucio Tan will exercise his right of first offer on government shares in the bank. (AP)
Reported by: Sol Jose Vanzi
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