Philippine stocks close lower, concerns on Maguindanao
The Philippine stock market closed lower on Monday as market participants booked their gains on concerns that the martial law in Manguindanao will weaken investor sentiment.
After touching a 21-month high of 3,119.96 last Wednesday, the market fell for the third time on Monday with the bellwether Philippine Stock Exchange shedding 0.5 percent or 15.36 points to 3,046.63. The all share index lost 0.45 percent or 8.63 points to 1,896.08. Of the six subsector indices, only the mining and oil counter was spared from the bloodbath, while property stocks shed the most.
Trading volume was high where a total of 6.39 billion shares valued at 11.7 billion pesos (254.6 million U.S. dollars) changed hands.
There were also more foreign sellers than buyers at 175 million pesos (3.8 million U.S. dollars), with 57 issues declining, 42 advancing and 66 were unchanged.
Philippine President Gloria Macapagal-Arroyo put the province of Maguindanao under martial law Friday night to curb the so-called "lawless elements [that] have taken up arms." Maguindanao is the site of the November 23 massacre that claimed the lives of 57 people including women and journalists.
An analyst at local brokerage Fidelity Securities, Inc. said the Philippine government's decision to put the entire Maguindanao province under martial law has drove away investors on Monday, who fear that such proclamation might spill over to the country's capital.
"There are no other news locally and overseas. The U.S. market was flat so there is not much news there. Investors are looking for an excuse to book their gains and they saw the political crisis in Maguindanao as the fitting reason," he added.
Local brokerage IGC Securities, Inc. said that investors fear that the martial law in Maguindanao might be a prelude to something big and this has caused investors to "panic a little".
But market analysts remain optimistic that the local market will still end the year above the 3,100 level. They're banking on the "Santa Claus market" which usually push up the equities market ahead of the Christmas festivities.