Markets badly battered

The financial markets were badly battered for the second day yesterday with the peso plunging to an all-time low of 46.90 to the dollar and stocks tumbling to their lowest level in two years on allegations that President Estrada received millions of pesos from illegal gambling operators, traders said.

The peso slipped to an all-time low of 46.90 to a dollar before closing at a record low of 46.89, or 34 centavos lower than Monday’s close of 46.55 to $1.

The 30-company Philippine Stock Exchange plummeted 32.79 points, or 2.4 percent, to 1,332.22, its lowest closing level since Oct. 14, 1988, when it finished at 1,324.22 points.

The previous historical low for the peso was 46.61 to the dollar last week.

The local currency swiftly fell after opening yesterday, the Bankers Association of the Philippines said.

The bearishness toward the peso worsened after Ilocos Sur Gov. Luis ‘Chavit’ Singson said he has documents to substantiate his allegations that President Estrada received jueteng money.

Traders said the peso succumbed to the souring investor sentiment toward the Philippines in the absence of a clear signal from the central bank that it will aggressively support the local currency.

Demand for dollars was also exacerbated by legitimate corporate requirements. mostly for imports.

Bangko Sentral ng Pilipinas Gov. Rafael Buenaventura said the peso’s depreciation was in line with the fall of regional currencies and declined to comment on whether the BSP sold dollars in the spot market.

In stock trading, investor confidence was undermined by the allegations against the President and the peso’s continuing decline, said Michael Gotera, senior analyst for DBP Daiwa Securities SB Capital Markets.

On Monday, the main stock index fell 23.99 points.

Singson has yet to present any strong evidence substantiating his claims, the most serious yet against Estrada. The charges have nevertheless triggered discussing of impeachment proceedings.

"There’s that ‘I’ word, impeachment, which foreigners will look at are more seriously," Gotera said. 

Traders said the scandal may have a long-lasting impact on financial markets.

"It could be a long process, I don’t see results any time soon," Gotera said. "We may continue to go on a downtrend, with some pockets of technical rebound along the way."

A total of 58 losing stocks paced yesterday’s trading at the PSE, with only a dozen issues posting gains and 31 closing unchanged. Trade turnover remained at a loan P607.57 million.

The sectoral indices were mostly in the red, except for the mining counter which gained 1.69 percent due to the advance in Lepanto Consolidated and Philex mining.

Lepanto Consolidated Mining A shares were untraded but its B shares jumped 9.1 percent to 24 centavos as the company closed out yesterday the reckoning date for the grant of a 25 percent stick dividend payable later this month.

With the exemption of Manulife and the Philippine Depository Receipts (PDRs) of ABS-CBN, the most active stocks all headed south, in fact, the ten top traded issues all retreated, led by PLDT, SM Prime and San Miguel B.

In corporate news, the joint venture between MacroAsia Corp., and Ogden Airport Services Corp. has inked a deal with Thai International Public Co. Ltd. the operator of Thai Airways, for ground handling services as the NAIA. MacroAsia is the listed airline support services unit of tycoon Lucio Tan, the majority owner of two of the country’s airline fleet flag carrier Philippine Airlines and domestic carrier Air Philippines.

Philippine Gaming Management Corp., a wholly-owned subsidiary of the Prime Gaming Philippines, has set aside P77.74 million for the purchase of 325 lottery terminals as part of its 2,000-set lease agreement with the Philippine Charity Sweeptakes Office.