Philippine stocks still in doldrums

MANILA, Philippines – The local stock market reversed a strong opening to remain in negative territory on Tuesday, putting further at risk the slim index gains for this year, as investors were jittery over the country’s 2012 economic prospects.

The main-share Philippine Stock Exchange index shed another 16.84 points or 0.4 percent to finish at 4,211.04.

The industrial counter weighed down the PSEi the most, declining by 1 percent. The holding firm and property counters also traded in the red while the services and mining/oil bucked the day’s downturn.

Value turnover was high at P15.3 billion, including some cross transactions. There were 70 advancers which were edged out by 81 decliners while 52 stocks were unchanged.

BPI, ICTSI, Meralco, SM Investments, EDC, ALI, Aboitiz Power, AEV and MPIC led the main index lower. Lepanto B also traded lower in heavy volume.

On the other hand, the PSEi’s decline was tempered by the gains posted by index heavyweight PLDT as well as by Philex, DMCI and BDO.

Most investors have yet to look past the country’s disappointing third quarter domestic output despite a recent recovery in global markets. Overnight, the Dow Jones industrial average was up 291.23 points or 2.59 percent at 11,523.01.

But while the latest economic report was indeed disappointing, First Metro Asset Management president Gus Cosio said it should not be a cause of worry.

“Growth remains to be present albeit slower, but the economy is still enviable in comparison to many around the world,” he said.

“Right now, the edge that investors are looking for is not just growth but the soundness of the economy. Many economies are having a difficult time growing and yet are nursing very vulnerable financial stresses such as over extension of fiscal deficits and government debt as well as ballooning non-performing assets of their banking sector. This is not the situation for the Philippines,” he said.

As the Philippine fiscal situation was stable, Cosio said the country could see some positive surprise if the government would try to catch up with their spending program in the fourth quarter.

“I am confident that the local market will be seeing Santa Claus these coming weeks. The guys in Wall Street said that the year 2011 was classic as in the textbooks. The icing on the cake could only be Santa’s coming to town,” he said.