Index ends firmer but off highs on US credit woes

Share prices closed 0.9 percent higher yesterday but quick profit-taking limited the upside amid continuing concerns over a possible credit crunch in the United States, dealers said.

The composite index added 33.74 points to 3,501.20 but was well off the day’s high of 3,545.70.

The broader all-share index rose 16.91 points to 2,268.96.

Declines led gains 62 to 48, with 54 stocks unchanged.

“The market started out strong with investors scooping up bargains from the previous declines but it weakened at the end of the session. Obviously, investors are still nervous about potential wild price swings,” said Lawrence de Leon of Accord Capital Equities.

He forecast that trading will remain volatile in the near-term as the market looks for a more comfortable support level.

Gomer Tan of Regina Capital Development Corp. said the key composite index can build a strong base at 3,500 points but noted that the market is “still jittery. We can expect investors to focus on the US housing and credit concerns.”

In a business forum held yesterday, International Monetary Fund (IMF) managing director Rodrigo de Rato warned of risks associated with financial globalization that could threaten the global economy, citing current concerns over the US subprime housing market as an example of such risk.

“There are risks associated with financial globalization, and I am concerned that these are still not fully appreciated. We have already seen this phenomenon play out in the subprime mortgage market in the US,” De Rato said.

De Rato said that while the US subprime market woes do not yet pose a systemic threat to global growth, he urged regulators to remain vigilant about these deals and to pay close attention to those deals whose failure could have systemic implications. Rato said however, that the outlook for the global economy remains positive, and projected growth to exceed more than five percent this year. 

The day’s top gainers included property stocks, Ayala Land, up 75 centavos at P17 while Megaworld rose 15 centavos to P3.85.

Ayala Corp. rose P15 to P530.

Newly listed broadcaster GMA Network was up 25 centavos at P10.75. GMA debuted strongly on Monday, rising 23.5 percent from its offer price of P8.50. — AFP