STOCKS PLUNGE ON DOW DROP, MALL BLAST
MANILA, OCTOBER 23, 2007 (STAR) The stock market nosedived by more than 150 points yesterday, the biggest decrease in the region, with investors unnerved by Wall Street’s hefty losses and the explosion at Glorietta mall in Makati which killed 11 people and injured more than 100.
The blast at the upscale Glorietta mall, owned by listed property developer Ayala Land Inc. (ALI), raised security concerns, but local police are still investigating whether it was an accident or an act of terrorism.
“The market not only had to contend with Wall Street’s glum performance, it had to deal as well with another negative catalyst which is the blast at Glorietta,” said Jose Vistan Jr., research director at AB Capital Securities.
The Philippine Stock Exchange (PSE) composite index plunged 151.88 points or four percent to close at 3,667.87.
It was the biggest single-day point loss since Aug. 16 and the key index’s weakest level in three weeks.
It fell as much as 4.4 percent to a low of 3,626 during the session.
The broader all-share index lost 95.38 points or 3.9 percent at 2,292.80.
Losers overwhelmed gainers, 144 to five, while 19 stocks ended flat. A total of 6.1 billion shares worth P5.6 billion changed hands.
While the blast that rocked Glorietta took its toll on the market, the bigger drag was Wall Street’s beating as it renewed concerns over the slowing US economy.
The Dow Jones Industrial Average dropped more than 360 points on Friday.
“Markets in the region, including the Philippines, have been rallying in recent weeks after indications that the worst is over as far as the credit crisis is concerned. Now that the uncertainty is back, it means that instead of these problems blowing over, the concerns may even be deeper,” said Rommel Macapagal, chairman of Westlink Global Equities.
Asian stocks tumbled yesterday after the Group of Seven industrialized nations said the global economy is slowing.
In Japan, the Nikkei 225 stock average slid 2.2 percent to 16,438.47, its lowest close since Sept. 26. South Korea’s Kospi fell 3.4 percent, led by Samsung Electronics Co.
Index heavyweight Philippine Long Distance Telephone Co. (PLDT) paced decliners, giving up P95 or three percent at P3,015. Shares of Ayala Land, the country’s biggest property developer, lost 75 centavos or 4.4 percent to settle at P16.25, after losing as much as eight percent intraday.
“I think Ayala Land is holding up well despite the knee-jerk reaction. The fact that it bounced back a bit means investors are choosing to view the company’s fundamentals,” said Vistan.
Ayala Land, however, will continue to be vulnerable to profit-taking as investors assess the damage resulting from the blast, said Lawrence de Leon, analyst at Accord Capital Equities.
“In the next couple of days, investors will be interested on how much the explosion will cost Ayala Land, how much revenue and opportunity were lost as some portions of the mall will remain closed.”
Ayala Corp, the parent of Ayala Land, shed 30 pesos or 5.2 percent at P550. Financial counters were also hit by profit-taking with another Ayala Corp unit, Bank of the Philippine Islands, falling P4 or 5.8 percent at P64.50. Metropolitan Bank and Trust Co, the country’s biggest bank in terms of assets, lost P4.50 or nearly seven percent at P60. Food and beverage conglomerate San Miguel Corp’s A-shares edged down P1.50 or 2.5 percent to P58.50, while its B-shares retreated P1.50 or 2.4 percent to P60. — Technistock
OPINION: Glorietta blast: What’s the effect on tourism? TAKIN’ CARE OF BUSINESS
(STAR) By Babe Romualdez Tuesday, October 23, 2007 The Glorietta 2 explosion last Friday will not affect our present tourism program that much, assures Tourism Secretary Ace Durano – and he may just be right. After all, the tourists we are getting are mostly on package tours whose destinations are to the islands and provinces, not necessarily in Metro Manila. Nonetheless, the quality tourists – the kind that we need more of – will obviously reconsider traveling to the Philippines and may have second thoughts about visiting the country. It’s difficult enough to explain to potential tourists – even to foreign investors who want to come in for the first time – that the kind of unrest and terrorist activities going on in the South are far away from Metro Manila. But now, this Glorietta blast.
In a sense, we’re lucky that coverage in CNN and other media outfits in the United States was overshadowed by news of the brutal suicide bombing in Pakistan, where close to 150 people died during a motorcade celebrating the return of former Pakistani Prime Minister Benazir Bhutto. Nonetheless, we have to learn from this Glorietta tragedy. We cannot take security for granted, and we have to be aware of the fact that terrorism is a reality that threatens all nations.
As usual, all sorts of theories are coming out with text messages flying all over the place speculating about who could have been responsible for the blast. Naturally, politics is coming into play once again with accusations that the administration, specifically National Security Adviser Norberto Gonzales – is behind the explosion supposedly as a diversionary tactic – an irresponsible statement at this time. As it is, Gonzales and jailed senator Antonio Trillanes are engaged in a tit-for-tat with both men trading accusations on who was really responsible for the Glorietta incident. From what I understand, National Bureau of Investigation Director Nestor Mantaring is quietly working with the US FBI to try and find out the cause of the explosion – which could prove to be a more objective investigation.
Crackpots lost no time in capitalizing on the tragedy, with a man claiming to be a member of the Rajah Sulaiman Revolutionary Movement sending text messages mostly to members of the media warning of an impending jihad – which was promptly dismissed by a number of broadcast journalists who recognized the cellphone number as the one used to habitually send either bomb threats or claim responsibility for other tragedies.
On the other hand, one could not really blame people if they readily believe rumors claiming the government is responsible for the blast. People still remember the bogus assassination attempt on then defense minister Juan Ponce Enrile which he himself admitted was a set up to justify the eventual declaration of martial law, and the Glorietta explosion has given rise to fears that the GMA administration will use the tragedy to place the country under a state of emergency – which I personally don’t believe.
But as always, even a tragedy like the Glorietta explosion will never be complete without the usual Filipino humor going into overdrive. The other day, I received a forwarded text message from Venezia bar owner Louie Ysmael saying “the reported mastermind is resigned Comelec Commissioner Ben Abalos because he thought Venezia (which is located in Glorietta 2) is owned by Joey de Venecia.”
What’s important at this point is to find out what really caused the blast. I’m sure PNP chief Gen. Sonny Razon will do a good job with the investigation, helping calm the jittery nerves of people by urging them to go about their normal activities. The bottom line is, no matter which way we look at it, we have to learn from this tragedy. Whether it was caused by a security lapse or an accident caused by a gas leak or some other reason, a tragedy of this magnitude must be taken very seriously. Aside from the loss of lives and the damage to property, the incident is giving this country another bad image abroad that we cannot afford. The timing obviously sucks, making people suspicious, coming in the wake of all those controversies and scandals hounding the GMA administration – giving political opportunists the excuse to exploit it and take advantage of the situation.
Our image abroad has always been on a seesaw – up one time, down the next – and it’s important to convince people, especially tourists, that Metro Manila is not under siege. Ace Durano – who was our guest speaker at the MOPC forum last night – told us he is working double time to show that the country is stable and that the G2 blast was an isolated incident. Fortunately so far, it looks like it’s business as usual, with the economy still stable and the stock market just taking a slight dip.
Chief News Editor: Sol Jose Vanzi
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