PSEi falls below 6,500

MANILA, Philippines–Local stocks saw a bloodbath for the sixth straight session on Monday, dragging down the main index back to the 6,500 level, as fresh jitters in the euro-zone shook up regional markets.

The main-share Philippine Stock Exchange index tumbled by 118.42 points or 1.78 percent to close at 6,536.18.  The index has so far pulled back by 330.92 points or 4.8 percent from its recent all-time high of 6,867.10 points.

This developed as a peculiar bailout proposal for Cyprus revived concerns on the euro-zone.  Euro zone finance ministers want Cyprus’ depositors to give up 9.9 percent of their deposits in exchange for a 10-billion euro aid package. It is the first time in this fiscal contagion that savers were asked to shoulder part of the bailout which investors fear could be a dangerous precedent.

A pause in Wall Street’s 10-day winning streak also intensified risk-aversion across the region.

All counters were in the red but the most battered were the property (-2.88 percent) and holding firm (-2.81 percent) counters.

Value turnover amounted to P9.77 billion.  There were four times as many decliners (136) as there were gainers (34).

“With today’s breakdown of 6,650 levels, the drop accelerated, highlighting more weakness ahead towards 6,000-6,250,” said Jonathan Ravelas, chief strategist at Banco de Oro Unibank.

Ravelas said it would be good to re-enter the market at around 6,200 levels just in time for the first quarter earnings stream.  “At the moment, (there’s) no news to spark rally),” he said.

Investors sold down shares of BDO, Ayala Corp., Ayala Land, PLDT, URC, SMIC, Megaworld, AGI, EDC, Bloomberry, Petron, SM Prime, JG Summit, DMCI, MPI and Meralco.  Second-liners GT Capital, Vista Land and Puregold likewise succumbed to profit-taking.

One of the few that bucked the day’s downturn was Metrobank, which rose by 1.65 percent in heavy volume after the bank announced a 30-percent stock dividend to form part of a P50-billion hike in authorized capital.

“PSE index stocks can continue to consolidate.  It’s going to be a stock picker’s game for the next few days,” said First Metro Asset Management Inc. president Gus Cosio.