Thursday, March 01, 2007 RP stock prices dive 7.2%
MANILA - Share prices tumbled 7.92 percent yesterday in a sharp reaction to falling Asian markets, with the key index ending at its lowest level in six weeks, dealers said.
They said investors were rattled by the sell-off on Wall Street overnight that followed a sharp fall on the Shanghai market last Tuesday on concerns that prices were over-inflated.
In mid-day trade, Shanghai appeared to have regained its composure and was trading steady.
“The sell-offs on the US and China markets have caused worldwide jitters. This is definitely a good reality check and for the Philippine market, it’s the major correction that we have been waiting for,” said Astro del Castillo at First Grade Holdings Inc.
Analysts said the Philippine economy remains stable and the drop could be a good chance for fund managers to start accumulating stocks before any upward correction.
“The country’s economic fundamentals are solid because of the appropriate policies set by the government,” said Ron Rodrigo, research head at Unicapital Securities.
“Investors are jittery all over the place,” said Francisco Liboro, president of PCCI Securities, saying last Tuesday’s sell-off in China had triggered a chain reaction around the world.
Good buying
“We don’t know how steep this slide will go ... how long the panic will last. But clearly at these levels there is some good buying opportunities,” Liboro said.
Cebu Holdings Inc. (CHI) president Francis Monera agreed that the sharp correction could be an opportunity to buy. He said the shares of Ayala-affiliate CHI was maintained at a high of P3.90 each.
PSE president and chief executive officer Francis Lim said this was the biggest point loss of the PSE index in a single day since February 1990.
“But the market’s fundamentals remain strong,” Lim said in a press statement.
He said as “favorable factors remain intact, they will help companies, especially the listed corporations, improve their overall profitability and attractiveness to investors.”
“What happened today... reflected a nervous reaction to the sharp drop in the benchmark index of China, which suffered its single biggest drop in a decade,” he said. “Our market just followed a global retreat.”
He said while the market will feel the effects of the ensuing global reaction to the event, the “underlying concerns that triggered the jolt in China are internal to that country.”
He said there are concerns among investors in China that the Chinese Government might come up with measures to prevent its stock market from overheating.
There are also reports that the Chinese Government wants to crack down on fraudulent or highly speculative stock market practices. (AFP/with LAP/JBN)
