Index rises 19 pts as investors gobble up blue chips

Local stocks rose yesterday as investors accumulated blue chips after the extended holiday weekend passed relatively peaceful amid political scandals dogging President Arroyo, dealers said.

The 30-company composite index climbed 18.61 points or one percent higher at 1,955.79 after rising 38.94 points Friday following a three-day plunge of more than seven percent on political and security jitters.

Financial markets were closed Monday for a post-Independence Day holiday.

The broader all-shares index finished up 6.63 points at 1,187.51 following a 16.60-point gain Friday. Losers still beat gainers 34 to 33, with 36 issues unchanged.

Dealers said there is concern that the economy could suffer in the political fallout from President Arroyo’s problems even though she is standing firm, especially given recent progress on the fiscal deficit.

The market still showed signs that investors remain worried over recent political developments, particularly the alleged wiretap conversations that suggest Mrs. Arroyo rigged last year’s elections.

"Volatility is the word of the week," said Mark Canizares, investment analyst at Citiseconline.com. "The market will be swayed by whatever will unfold in the next few days. At this point, the stock market isn’t for the faint of heart."

Dealers said the sharp decline in share prices for the most part of last week has provided investors opportunity to re-enter the market and buy cheaper stocks, while still mindful of the volatile political situation.

"The difference between the market today and the market during the previous years, which also had an air of political uncertainties, is that there is now a backdrop of positive economic and corporate fundamentals," AB Capital Securities research director Jose Vistan Jr said.

He was referring to the market conditions prevailing at the time Arroyo’s predecessor, Joseph Estrada, was ousted from power in Jan. 2001.

"Once the (political) issues start to peter out, we should see the main index rally and hit a new high for this year," Vistan said.

Philippine Long Distance Telephone Co. remains the primary focus of investors, accounting for nearly 40 percent of total transactions yesterday. It gained 1.6 percent to end at P1,560.

Other advancers were Ayala Land, SM Prime and Philippine National Bank. Ayala Land and SM Prime each gained 1.3 percent, with both closing at P8. PNB surged 13 percent to P38.50. – AP