Index inches up 2.6 pts on modest bargain-hunting

Share prices closed 0.13 percent higher yesterday as modest bargain-hunting in the banks enlivened an otherwise sluggish market, dealers said.

They said renewed political jitters and a further delay in the collection of a expanded value-added tax (EVAT) law continue to weigh on sentiment.

The Philippine Stock Exchange (PSE) composite index rose 2.59 points to 1,940.94 after trading between 1,943.74 to 1,931.36 points.

Turnover stood at 782.8 million shares worth P914.27 million.

The all-shares index gained 1.07 points to 1,179.59.

Gainers slightly edged out losers 40 to 35, while 41 stocks ended unchanged.

"Politics is one of the more obvious reasons for the market’s weak showing," said Ron Rodrigo of Accord Capital Equities.

"However, selling among local investors is being offset by foreign buying," he said, remarking foreign fund managers have looked past the issue of politics and have instead focused on corporate fundamentals.

The law implementing an expanded VAT has remained stuck in the Supreme Court for months despite government warnings that the tax is needed to forestall a fiscal crisis. The court ruled last month that the statute is legal, but opponents have challenged the ruling, which has yet to be implemented.

On the political front, President Arroyo continues to battle the legislature, banning members of her cabinet and other officials from testifying at congressional public hearings into alleged corruption in government.

Philippine Long Distance Telephone Co. (PLDT) retreated P10 to P1,685.

Globe Telecom fell P10 to P725. Manila Water advanced 20 centavos to P6.30.

SM Prime Holdings ended up 10 centavos to P7.40.

San Miguel B shares, available to all investors, fell P3 to P88.50. San Miguel A shares, limited to Filipino investors, was steady at P65.

The all shares, property, banks and financial services, and mining subindexes advanced, while the commercial-industrial, and oil subindicators retreated.

BPI gained 2.9 percent to end at P53.50, while Ayala Land was up 1.2 percent at P8.30 and SM Prime rose 1.4 percent to P7.40, possibly on expectations of favorable third-quarter financial results.

BPI Securities senior manager Roberto Cano said good news on inflation may have been somewhat offset by the continuing delay in implementing the expanded value-added tax law, the centerpiece of the government’s fiscal reform program meant to balance the budget by 2010. – AFP, AP<