Stocks slide as investors cash in previous day's gains

Local stocks resumed their downtrend after a brief recovery last Wednesday, as investors quickly cashed in on the previous day's gains following an aggressive hike in key overnight rates by the Bangko Sentral to counter pressures on the weakening peso.

The BSP raised its overnight borrowing and lending rates by half a percentage point each to 9.5 percent and 11.75 percent, respectively, in parallel with the 50-basis point hike in the benchmark US interest rates announced by the Federal Reserve Board last May 16.

The composite index slid 12.69 points or 0.83 percent to 1,521.36, still holding fort beyond the psychological 1500 support level, where most analysts feel the market will hover within the next few trading days.

Despite the battering from the deteriorating Mindanao hostage crisis, a debilitating series of bank runs, and interest rate jitters, the Phisix has managed to stay afloat the 1500 mark this year, ending at an 18-month low of 1505.21 last May 11.

The local market movement was in consonance elsewhere in the world: the Dow Jones industrial average, the Nasdaq index and the Asian markets (Hong Kong, Tokyo, Taiwan, Korea and Thailand) likewise chipped off earlier gains. The bourses in Singapore, Indonesia and Malaysia were closed due to a public holiday.

Analysts said investors pulled out cash and trading remained thin as fun managers watched from the sidelines, anticipating another round of interest rate increases -- although at a milder pace -- by the Fed to douse cold water on the overheating US economy.

All sectoral indices fell except for a resurgence in the mining counter, as stocks like Dizon Copper-Silver Mines Inc. and Manila Mining paced the day's 22 advancing stocks.

Volume of trades hit 1.023 billion shares valued at P539.15 million, reverting to a thin market turnover of below the P1 billion level.

There were 40 stocks that lost ground, led by heavyweight PLDT which cut back on its prior day's P30 gain to drop P10 lower at P725 following the slide in its shares in New York.

BW Resources was the most active stock although its price was unchanged at P5.40. Vantage Equities gained 12 centavos to P1.68 after its stockholders approved its transformation into an information technology (IT) holding company with top-notch recruits from the local IT industry leading its new management team.

The two Canadian insurance giants Manulife and Sun Life fell on profit taking to P635 and P555, respectivelly. Manulife said its first quarter results showed a 15-percent jump in net income to C$225 million, on the back of a 44-percent surge in premiums and deposits values at C$6.525 billion. The company hence declared a C50.10 cash dividend to all shareholders payable on July 7.

Sun Life said its company's board approved the repurchase of up to 21.084 million common shares representing five percent of the oustanding shares under a "normal course issuer bid" within a one-year period starting May 15, 2000.

Domestic port operator International Container Terminal Services Inc. said there are plans to spend some $200 million, along with its consortium members Asian Terminals Inc. and WG&A, for the expansion and modernization of the Manila North Harbor facility -- the country's largest port -- once they clinch the bid for the exclusive management and operation of the port.

Ionics Circuits Inc., the Philippine' largest electronics contract manufacturer, posted a robust 30-fold jump in net income to P1.65 billion in the first quarter, owing primarily to the P1.59-billion one-time gain from the increase in its net book value of and sale of a portion of tis share in Ionics EMS, the spun-off electronics manufacturing services firm which listed in Singapore.