Shares continue to retreat, hit new low of 1,551.90 pts

The stock market shrugged off the favorable inflation figure with the composite index falling for the third straight day to end the week at 1551.90, a new low since the index closed at 1.523.98 on Oct. 23, 1998.

The combined effects of the armed conflict in Mindanao, the financial distress in the banking sector that dragged companies with exposures in Urban Bank, weak corporate earnings and an anticipated 50-basis point interest rate hike to be announced by the US Federal Reserve Board, all weighted down on investors' sentiment, keeping them on the sidelines with barely any incentive to trade.

This was despite yesterday's report by the national Statistics Office of a 3.7 percent nationwide inflation rate in April, which was favorably below government's expectations.

Even with the downtrend, the stock's retreat was limited to a mere 1.44 points or 0.09 percent, raising the possibility that the market could be gearing up for a technical rally by next week, although the volatile hostage situation in Mindanao, which has attracted international attention, remains a cause for concern.

Declining stock continue to dominate, with 63 issues on the losing side compared with 31 advancers and 37 non-movers. A total of 3.255 billion shares worth P914.465 million changed hands in yesterday's trading.

The index-heavy blue chip stocks, led by PDLT and San Miguel were still the most actively traded -- reflecting the continued absence of speculative investors who have often driven the market crazy with bets on such issues as Internet firms PhilWeb, Vantage Equities,Ajo.net, Island Mining, Imperial Resources and gaming firms Belle Corp., Waterfront, and the controversial BW Resources.

Leading the gainers this time was First Abacus Financial Holdings Corp., the previous day's top loser, as it price bounced bank 46.15 percent to 57 centa-vos. Other advancers include Magnum Holdings, Interport Resources, Reynolds Philippines and EEI Corp. which reported a 10-fold profit increase to P35 million during the first quarter.

Among the leaders on the losing side, meanwhile, were Alsons Cement, Unioil, EDSA Properties, Negros Navigation and Anglo-Phil Holdings.

As a consequence of their to the closed Urban Bank, share prices of companies like San Miguel, AJO.net and Dizon copper-Silver Mines Inc. went down. The foreign-heavy SMC "B" closed P1 lower to P51 while DCSMI, whose trade was briefly halted due to its sharp price movement, closed firm at P7.50.

San Miguel is taking Urban Bank to court to get back its P1.3 billion placement while DCSMI owns an eight percent equity in the bank.