Stocks hit 3-year low as investors lie low

Philippine stocks plunged to a three-year low yesterday as the daring terrorist attacks in the US capital sent investors scurrying for cover, taking refuge in mining shares and the local currency.

"The situation was not good but it could have been worse," said veteran stockbroker Irving Ackerman, who heads his own securities firm I. Ackerman & Co. Inc.

At the close of trading, the 30-company composite index dropped 52.70 points or 4.07 percent to 1,241.39. It was the market’s biggest decline in nine months or since Jan. 17, when the Phisix fell 93.16 points or six percent after the historic Senate vote on then President Estrada’s impeachment trial weighed down heavily on the market’s sentiment, similarly affecting the peso-dollar exchange which touched the P56:$1 mark.

Ackerman said despite the huge drop, local equities still fared better than the other markets in the region, where expectedly, stocks also went on a downswing following the devastating air attacks in New York’s World Trade Center, the White House and the Pentagon outside of Washington, DC.

Among those deeply hurt were the bourse in Japan, Hong Kong, Singapore, Korea and Indonesia. The US markets (New York Stock Exchange, American Stock Exchange and Nasdaq) remained close, as were trades in Taiwan, Malaysia and Thailand.

"In a way, the market’s decline was smaller than expected," Eagle Equities president Joey Roxas said, echoing Ackerman’s contention that the Phisix was not as badly affected as the other regional indices.

"The US incident sent shockwaves to the global community but the thing is, it has nothing to do with the domestic economy," Roxas said.

Only nine stocks advanced in yesterday’s trading, led by mining issues such as Manila Mining, Philex and Lepanto as international gold prices soared following an uptick in demand. In times of crisis, gold is considered as the best investment option to hedge against.

Still, 73 stocks tumbled while 18 others were unchanged. Except for the mining counter, all sectoral indices went down although value turnover improved slightly to P623.663 million.

Traders said although volume of trades increased, there was no real panic selling as most foreign funds only have light positions in the local market.