Philippine stocks extend losses today on China debt concerns

MANILA, Philippines (Xinhua) - The Philippine stock market extended its losses today pressured by continued concerns over China's mounting debts.

The bellwether Philippine stock exchange index slipped by 1.37 percent or 88.95 points to 6,420.78. The broader all-share index fell by 1.13 percent or 44.76 points to 3,922.28.

Trading volume reached 668 million shares worth P5.94 billion ($136.47 million) with 111 stocks declining, 43 advancing, and 38 unchanged.

Of the six counters, only the mining and oil sector bucked the trend.

"A fall in the US stocks overnight and an almost flat close in Europe left investors with little leads to actively trade local stocks," analyst Justino Calaycay of Accord Capital Equities Corp. said in his daily stock market comment.

The biggest concern right now, he said, is China's debt burden.

China, which for nearly three decades grew at double-digit pace and overtook Japan as the world's second largest economy, is seeking to address bad debts at the local government levels.

This, Calaycay said, caused positive developments locally to be overshadowed, resulting in the drop in the local share prices.

The analyst noted that there is already a good number of companies which have reported their second quarter and first half year numbers yet the local equities seem to be searching for more leads. Corporate figures, so far, have been consistent with expectations.

"Yet the market continues to trek south apparently sharing in the prevailing pessimism felt across the region as China's debt burden looms large," he said.

Following Tuesday's drop, Calaycay said investors might turn to check the charts and ignore for the moment the fundamentals.

Stocks in the 30-company index were mostly down. These issues include the Bank of the Philippine Islands, Alliance Global Group, Inc., and SM Investments Corp.

In other news, fast-food giant Jollibee Foods Corp.'s net profit in the first half year rose by 32.7 percent on year to 2.1 billion pesos (48.26 million US). System-wide sales  measure of all sales to consumers, both from company-owned and franchised stores  hit 49.9 billion pesos (1.15 billion US), up 12.1 percent on year.

The Philippine business grew by 12.6 percent while the overseas business expanded by 17.5 percent with China growing by 18.3 percent, Southeast Asia and the Middle East by 34.8 percent and the US by 6.3 percent.