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Business

Estrada impeachment perks markets

- Conrado Diaz Jr., Marianne V. Go -
Former Speaker Manuel Villar’s bold move to impeach President Estrada perked the languishing financial markets yesterday, causing the peso to strengthen against the dollar and the stock market to climb nearly 14 points.

At the Philippine Dealing System (PDS), the peso gained 52 centavos to close at 49.830 from Monday’s close of 50.350 to the dollar. The peso hit a high of 49.650 and a low of 50.300 before averaging at 49.885 to the dollar. Total volume traded amounted to only $93.50 million.

"The impeachment proceedings at the House yesterday were positive for the peso. Corporates are unlikely to buy up the dollar and the nationwide protest today (yesterday) looks like it’s already factored in. If it’s peaceful, it will not hurt the market," a trader at one of the biggest banks said.

Bangko Sentral ng Pilipinas (BSP) Governor Rafael B. Buenaventura attributed the peso’s appreciation "to the fact that the market is beginning to stabilize and is now trading within a band." He said the BSP did not intervene in the forex market.

Buenaventura also said that remittances from overseas Filipino workers are already beginning to come in as most now believe that the foreign exchange rate has peaked and now may be the best time to get the higher rate.At the Philippine Stock Exchange (PSE), the 30-company composite index rose by 13.64 points to settle at 1,469.58 even as some traders staged a walkout to pressure President Estrada to resign over the alleged jueteng payoffs.

Some 40 percent of brokers on the Makati stock floor and 20 percent in Ortigas walked out 30 minutes before the close.

"We want to send the message that we are mourning what is happening in our country," said PSE governor Vivien Yuchengco, among the exchange’s board members who led the walkout.

Turnover slightly improved to P724.319 million from P696.343 million the previous day as buying orders–reportedly from government financial institutions (GFIs)–propped up deals. This despite foreign fund houses, which are allegedly being used as conduit by the GFIs, reverting to net sellers after a long streak of 17 straight days on the net buying side.

Traders said investors picked up bargain stocks, with sentiment generally improved on hopes the Estrada issue may be resolved soon.

"This is euphoria from yesterday’s events at the House of Representatives," another dealer at a foreign bank said.

The House of Representatives on Monday elevated to the Senate the Articles of Impeachment against the President, paving the way for an unprecedented trial that could lead to his ouster.

Many businessmen and workers, however, fear that a prolonged impeachment trial will hurt investor confidence and further damage the economy.

At yesterday’s trading at the PSE, only 82 stocks were traded with advancers swamping losers, 32 to 12 and 38 issues unchanged.

"Volume-wise, the market is pretty quiet. Earlier on, there has been an observable lack of selling and buying activities," said Albert Chua, portfolio manager of All AsiaAsset Management.

While he acknowledged that players from both sides of the political fence could take credit for the market’s uptick, Chua said it was basically technical-driven, not emotion centered.

"Whether its pro or anti-Estrada, one should not take the market results as highly significant because there has not been much volume to speak of," he said.

Chua said for the next few days, the market’s movement will likely be a guessing game, depending on the actions of the GFIs, but added this will also create a window of opportunity for short-term positioning.

Globe Telecom was the heaviest traded issue with over 35 percent of total transactions as the Ayala-owned unit reported a hefty 62 percent rise in net income to P1.05 billion in the first nine months, fueled primarily by the gains in its wireless division? Its price, however, stayed fixed at P640.

PLDT was the second most active stock, cornering 20.8 percent of trades, as it rose P20 to P835, on the heels of its admission it was in exploratory talks with ABS-CBN for a "potential business collaboration" involving their landline and cable TV units.

ABS-CBN, however, denied there were any discussions with PLDT on the possible merger of their respective media and telecommunications interests. PLDT dropped 50 centavos to P50.50.

Shares of Manulife and Sun Life declined by P40 and P30, respectively, following the drop in their New York prices and the improvement in the peso’s value. – with wire reports

ALBERT CHUA

AT THE PHILIPPINE DEALING SYSTEM

AT THE PHILIPPINE STOCK EXCHANGE

BANGKO SENTRAL

HOUSE OF REPRESENTATIVES

MARKET

PRESIDENT ESTRADA

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