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PHILIPPINE stocks fell the most in a week on higher oil
prices and renewed concern over the
US
housing slump after Citigroup Inc. said defaults may
worsen in the world’s biggest economy.
Philippine Long Distance Telephone Co. (PLDT) and Ayala
Corp. led the decline among the nation’s biggest
companies on speculation that rising defaults will make
credit harder to obtain and aggravate a slowdown in the
US economy, the biggest market for Philippine products
and labor.
“The
impact of the
US
housing slump is far from over and it is reviving
concerns of a liquidity crunch,” said Allan Yu, who
helps manage $3.17 billion at Manila-based Metropolitan
Bank & Trust Co. “The price of oil is again at a new
high and that could fuel inflation.”
The
Philippine Stock Exchange Index fell 46.16, or 1.2
percent, to 3,815.22 at the close in
Manila, after rising 1 percent Monday. The measure fell as much as
1.6 percent earlier Tuesday.
PLDT the
nation’s biggest company by market value, lost P35, or
1.1 percent, to 3,050. Ayala, the third-largest company,
declined P15, or 2.6 percent, to 560, extending a
2.5-percent drop Monday.
US
stocks Monday fell the most in five weeks after
Citigroup said late payments on home loans may worsen in
the fourth quarter and Federal Reserve chairman Ben S.
Bernanke said the housing slump will be a “significant
drag” on US growth into next year. Both the Standard &
Poor’s 500 Index and the Dow Jones Industrial Average
tumbled 0.8 percent.
The US
buys almost 20 percent of Philippine exports and
provides half of the funds sent home by overseas
Filipino workers. Exports account for 40 percent of the
nation’s economy, while remittances contribute at least
10 percent, spurring consumer spending on food, mobile
phones, cars and homes.
“The
fear that the
US
housing slump will lead to a credit crunch is coming
alive again,” said James Lago, head of research at
Westlink Global Equities in
Manila.
“It’s wrong to think that the impact of the housing
crisis will disappear in a month or two.”
SM Prime
Holdings Inc., the largest Philippine shopping mall
operator, declined 75 centavos, or 5.9 percent, to P12,
its biggest drop in two months. International Container
Terminal Services Inc., the nation’s largest port
operator, fell P1.50, or 3.6 percent, to 40.50.
Oil for
delivery in November traded 0.2-percent higher at $86.34
a barrel in after-hours trading at the New York
Mercantile Exchange. It closed at a record $86.13 a
barrel Monday, after climbing 9 percent for five
straight days. The Philippines buys most of its oil
overseas.
“High
energy costs are bad for inflation,” said Lago. “Rising
oil prices squeeze margins and weaken consumers’
purchasing power.”
Manila
Electric Co., the largest Philippine power provider,
lost P1, or 1.2 percent, to 86. San Miguel Corp. Class B
shares, equity in the largest food and drinks company
that has no ownership restrictions, fell P1, or 1.6
percent, to 62.
Separately, First Philippine Holdings Corp., which
invests in energy including Manila Electric, rose P1.50,
or 1.7 percent, to 88.50, rounding a four-day, 6-percent
gain on speculation that it will win in Tuesday’s bid
for the government’s 600-megawatt coal-fired Calaca
power plant.
Philex
Mining Corp., the largest Philippine metal producer,
decreased 20 centavos, or 2.2 percent, to P9.10, after
climbing to a record Monday.
The
stock’s relative strength index, based on price gains
and losses over the past 14 days, was at 79 Monday, when
its share price surged 13 percent. A reading over 70
suggests to some analysts the stock is poised to fall.
Shares
worth P4.99 billion ($113 million) were traded,
9.6-percent less than the six-month daily average.
Losers outnumbered gainers 87 to 42 in the broader
market.
---Bloomberg
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