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Peso drops because of hostage


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MANILA, Philippines - Local stocks and the peso tumbled yesterday, a day after the bloody hostage drama that took the lives of nine people, mostly tourists from Hong Kong.

 

The main Philippine Stock Exchange index (PSEi) ended a six-day winning streak, losing 2.3 percent or 82.88 points to close at 3,530.49 points.

 

The broader all-share index dropped by 1.6 percent or 36.47 points to 2,242.98, as the global spotlight focused on local police officials' handling of the bloody incident. Hong Kong, a regional financial hub, has issued a top-level black travel alert for the Philippines.

 

Analysts, however, said yesterday's decline was in line with lackluster trading in Asia as investors worried anew over stalling global economic recovery, but the bloody ending Monday night of a 10-hour hostage-taking incident in Manila also helped in pulling down the index.

 

At the foreign exchange market, the peso retreated 47 centavos to close at 45.53 to $1 from Monday's 45.06 to $1. The peso opened weaker at 45.22 to a dollar before hitting an intra-day low of 45.55 to $1.

 

Trade at the Philippine Dealing and Exchange Corp (Pdex) was heavy at $1.308 billion from Monday's $737.4 million.

 

Bangko Sentral ng Pilipinas (BSP) officials said the hostage drama was an isolated incident and not likely to have an impact on the local financial markets.

 

"That was a very unfortunate incident but an isolated event and the markets will see through that. It should not have a significant effect on the market in general," BSP Governor Amando M.Tetangco Jr. said.

 

For his part, Astro del Castillo, managing director of First Grade Holdings said the market was hit by profit-taking just like its regional peers.

 

"We've been up almost 18 percent to date. We are still leading compared to other Asian markets. The market needs to take a breather."

 

Del Castillo said market fundamentals remain intact despite the hostage crisis.

 

Decliners trounced advancers, 102 to 27, while 39 stocks finished unchanged.

 

A total of 896.794 million shares worth P4.2 billion changed hands.

 

A total of 102 shares declined, swamping 27 stocks whose prices moved up. Thirty-nine issues were unchanged.

 

Trading volume went down to 896.8 million shares worth P4.2 billion, from 1.4 billion shares worth P4.96 billion. All subindices went down, led by the property index which shed 112.65 points or nearly eight percent to 1,318.72.

 

Bank of the Philippine Islands (BPI), the banking arm of conglomerate Ayala Corp., shed 0.3 percent to P47.85.

 

BPI had listed its P10-billion stock rights offer which was oversubscribed by 41 percent.

 

The bank said the fund raising is meant to prepare for possible growth opportunities as well as to strengthen the bank's capital position.

 

BPI President Aurelio Montinola attributed the strong demand to the generally optimistic outlook about the local banking sector.

 

"We have a good first half, which was six percent over last year, but for the second half we should do much better," said Montinola.

 

BPI's first half net income stood at P5.6 billion due to improvement in both net interest and non-interest income.

 

Other stocks also ended in red yesterday.

 

SM Investments Corp., the most actively traded stock by value, lost 0.8 percent to P490 apiece.

 

Lender Metropolitan Bank and Trust Co. also fell one percent to P65.30.

 

Citiseconline head of research April Lee-Tan said the short-term outlook for the market is bearish.

 

Tan said she expects the market to be affected temporarily by the negative reactions to the bloody ending of the 11-hour siege by a former Manila policeman of Chinese nationals.

 

The hostage-taking, which resulted in the death of 8 Hong Kong residents, was watched by millions on live television.

 

"In the short term, there could be some more negative reaction to it. But as long as it doesn't happen on a consistent basis, confidence will return and investors will view this as an opportunity to get back into the market," said Tan.

 

 

http://www.philstar....ubCategoryId=66

Edited by Cary
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Alan S
Bangko Sentral ng Pilipinas (BSP) officials said the hostage drama was an isolated incident and not likely to have an impact on the local financial markets.

 

Wishful thinking!

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They are hoping that if they say it, it will happen. They appear to be fans of Peter Pan and Tinker Bell..tinkerbell.gif

 

 

Bangko Sentral ng Pilipinas (BSP) officials said the hostage drama was an isolated incident and not likely to have an impact on the local financial markets.

 

Wishful thinking!

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I hope I am wrong but it appears that the RP is already going back to their old play book of lip service and quickly going back to business as usual. Maybe that was ok in the 50' and 60's. But now we are in the information age and most countries are up to speed on the news. The good and the bad. And we all know bad news travels very fast. I repeat.. the RP needs to limit the lip service and actively start addressing known issues. No they can not be fixed now, but if they put in a real effort, the rest of the world will notice and start treating the RP accordingly.

 

 

Bangko Sentral ng Pilipinas (BSP) officials said the hostage drama was an isolated incident and not likely to have an impact on the local financial markets.

 

Wishful thinking!

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rfm010

"...as long as it doesn't happen on a consistent basis, confidence will return..."

 

yep, that's the sort of insight that earns these market researchers the big bucks.

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broden

though it's true over time people forget specific events it all develops in to an over all image over time in peoples minds . people don't have to be able to point to any specific things that make them feel however they feel about a certain place (or anything for that matter) it's just how they feel and once that happens it's really hard to change that image at least hard to change it for the better if it's bad

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JamesMusslewhite

They can see all that potential Chinese tourism and business investments possibly dwindling to a trickle.

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Bangko Sentral ng Pilipinas (BSP) officials said the hostage drama was an isolated incident and not likely to have an impact on the local financial markets.

 

Wishful thinking!

 

Talking-up their currency like nothing happened.

 

Well at least there is one aspect of this that is good news. The now somewhat fearful Filipino OFWs in Hong Kong will get more Pesos for their Dollar.

 

 

 

 

Mark

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Well at least there is one aspect of this that is good news. The now somewhat fearful Filipino OFWs in Hong Kong will get more Pesos for their Dollar.

 

Just in time for our kitchen and bathroom renovations!

Edited by Mailman
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