Index tumbles as investors take profits on rate concerns

Share prices closed 0.69 percent lower yesterday as investors took profits on the eve of a central bank policy meeting, dealers said.

They said some analysts expect the central bank to leave its key interest rates steady, as concerns about rapid growth in money supply would likely overshadow benign inflation and a strong peso.

But they also see a possibility that the central bank would eventually adopt measures to siphon off excess liquidity by tightening money policy.

The composite index shed 22.89 points at 3,295.28. It moved between 3,276.90 and 3,317.15.

The broader all-share index fell 16.03 points to 2,097.71.

There were 74 losers and 33 gainers, while 54 stocks were unchanged. A total of 1.93 billion shares worth P5.58 billion.

Dealers said investors also cashed-in some stocks to subscribe to the initial public offering of National Reinsurance Corp., the second IPO this year.

"Investors are cautious and staying on the sidelines ahead of the monetary board meeting.

"The rise in Treasury bill rates last Monday supports the view that there might be some policy tightening soon," said Jonathan Ravelas at Banco de Oro Universal Bank.

Rates on the benchmark 91-day and 182-day T-bills rose at this week’s auction, having hit record lows in previous weeks, as the government stopped offering one-year debt papers.

"Retail investors in need of cash for the IPO of National Reinsurance also took profits today," said Nestor Aguila of DA Market Securities.

National Reinsurance is offering up to P638 million at P3.80 per share. The tentative listing date is April 27. The company is a domestic reinsurance firm that provides life and non-life reinsurance and is eyeing expansion into regional markets.

Top-traded Philippine Long Distance Telephone Co.(PLDT) fell P15 to P2,500, while property developer Megaworld Corp. was down 15 centavos at P3.55.

Food and beverage firm San Miguel Corp.’s A-shares rose 50 centavos to P65.50, but its B-shares retreated 50 centavos to P73.50.

SM Development Corp. jumped, headed for a record, after the Philippine homebuilder said first-quarter profit grew eight-fold, boosted by stock gains and higher property sales. — AFP