Bombings send stocks tumbling to 5-week low

The stock market ended yesterday at its lowest level in five weeks as investors turned jittery following a series of bomb attacks in the southern Philippines.

"It’s (bombings) becoming a major reason why the market corrected...It claimed lives, it makes people jittery, so you’re bound to take profits," said Enrique Santa Ana, associate director for sales of DBS-Vickers Securities, Inc.

The main index broke immediate support in morning trade before recovering slightly to close 27.57 points down or 1.97 percent lower at 1,373.79 points. The index had fallen 2.4 percent in morning trade to reach a day-low of 1,367.57 points.

Two bomb blasts in the southern city of General Santos killed 14 and wounded around 50 people on Sunday prompting President Arroyo to order yesterday tough security measures, including imposition of curfews, to curb future terror attacks after police arrested two suspects.

"The bearish sentiment seen in the morning session had persisted into the afternoon trade; the tension in Mindanao coupled with the selldown on key index issues accounted for the market’s bearish bent," a report by BPI Securities said.

The Ayala-owned brokerage house said in its website report that the negative sentiment had been evident since the early part of trading, as the market digested the spate of deadly bomb blasts in General Santos City, triggering fresh concerns on renewed threats to the country’s peace and order situation.

Traders said the market was likely to remain weak in the coming days, with near-term support at the 1,360 level.

Turnover rose to P2.40 billion from the previous P925.96 million, including a cross sale of Bank of the Philippine Island (BPI) shares worth P1.45 billion.

Losers were in a near three-to-one majority.

Leading the market’s decline was heavyweight BPI which lost 7.33 percent in part due to its report of a higher non-performing loan (NPL) ratio and after a hefty gain in its shares last week.

A BPI official told Reuters the stake was sold by Sumitomo Mitsui Banking Corp., which previously held an 8.4 percent stake in BPI, but the buyer was not disclosed.

BPI fell P5.50 to P69.50. It reported its NPLs climbed to 13.98 percent as of March 22 from 11.6 percent at year-end 2001, with its loan loss reserves equivalent to only 57.53 percent of its total NPLs.

"There was profit taking on BPI. This (BPI shares) reached P75 pesos and that triggered the selling," said Henry Ong, vice president for sales of KGI Securities.

BPI Securities said the low transaction price at which the block transactions were effected contrasted sharply with BPI’s close last Friday, prompting investors to rethink pricing on the issue.

BPI’s parent Ayala Corp. slid 30 centavos or 4.55 percent to P6.30.

Property firm Filinvest Land Inc. lost 20 centavos or 7.27 percent after a local newspaper reported a stock exchange probe showed there were signs of insider trading in the company’s shares prior to its disclosure of a controversial bond deal.

Liquor manufacturer La Tondena Distillers Inc. bucked the general downtrend to end P2.75 higher at P27.50. The firm announced last week it was planning to buy back up to 10 percent of its capital stock.