Market rebounds 39 points after 3 days of sharp losses

Share prices ended sharply higher yesterday as the market rebounded from three straight sessions of losses amid political worries sparked by accusations against President Arroyo.

"The market’s rally was a result of a technical bounce. Fund managers accumulated stocks already trading at basement prices," said First Grade Securities managing director Astro del Castillo.

The benchmark 30-company Philippine Stock Exchange Index jumped 38.94 points, or 2.1 percent, to 1,937.18, after falling 7.4 percent over the past three days.

Blue-chip property stocks contributed much of the index’s advance. The property sector is widely expected to benefit from the current low interest-rate regime, which helps boost property demand. Ayala Land added four percent to P7.90, and SM Prime rose four percent to P7.90.

On the downside, blue chip Philippine Long Distance Telephone Co. fell 0.3 percent to P1,535 on last-minute profit-taking, after gaining as much as 1.6 percent during the session.

BPI Securities senior manager Roberto Cano said some investors may have also been emboldened to start positioning again in the market in hopes efforts to destabilize the Arroyo administration won’t succeed.

Yesterday’s thin value turnover, however, indicates investor confidence hasn’t completely returned to the market, analysts said.

"Value turnover was anemic, indicating caution over rumors of a possible destabilization plot that may unfold over the weekend," del Castillo said.

Financial markets will be closed Monday for a holiday, as the country marks 107 years of independence.

Positive export data for April, announched shortly before the open, provided investors with a reason to be upbeat about the economy despite the political tensions, they said.

Dealers said most investors remained reluctant to return to the market, worried about the political situation after the opposition called on President Arroyo to resign amid renewed allegations – which she denies – of fraud during last year’s elections.

Coup rumors have also been circulating and Arroyo has vowed to fight back against those trying to topple her administration.

Financial markets here will be closed on Monday after the government declared it a holiday. Trading resumes on Tuesday.

"The selldown in the past three days was a bit overdone so technically, this rebound was expected," said Mark Alan Canizares at Citiseconline.com.

"But investors remain generally nervous because something may happen during the three-day weekend," he added, noting that the selling pressure was still felt in the latter part of yesterday’s session. – AP, AFP