Index retreats as traders remain cautious ahead of MB meeting

Share prices closed 0.22 percent lower yesterday in an extended technical correction, with trade cautious ahead of a meeting of the central bank’s monetary policy board, dealers said.

They said there was speculation that the board may raise key interest rates again to fend off inflation.

The Philippine Stock Exchange composite index shed 4.62 points to 2,056.13 after trading between 2,054.18 and 2,062.56.

Volume reached 692.58 million shares worth P906.1 million. Losers outnumbered gainers 42 to 31, while 44 stocks ended unchanged.

The broader all-shares index retreated 1.87 points to 1,248.91.

"We’re going through the profit-taking stage after the recent run-up. Investors are just waiting for a bigger discount in prices before buying stocks again," said Nestor Aguila of DA Market Securities.

Ayala Land Inc gained 10 centavos to P9.40 while its parent Ayala Corp. advanced five to P312.50.

Manila Electric Co. (Meralco) B shares, available to local and foreign investors, gained 50 centavos to P22. Meralco A shares, limited to local investors, ended unchanged at P14.25.

San Miguel Corp. A shares ended steady at P65 while San Miguel Corp. B shares were down 50 centavos at P90.

The Energy Regulatory Commission said yesterday after the market closed that the imposition of a 12-percent value-added tax on electricity, fuel and previously exempt products next year will raise electricity prices by as much as nine percent.

Petron, the larger of the nation’s two oil refiners, fell 15 centavos, or 3.5 percent, to P4.10. International Container, the Philippine’s biggest port operator, lost 30 centavos, or 3.2 percent, to P9.10. Philippine Long Distance Telephone Co., the largest company by market value, declined P15, or 0.8 percent, to 1,770.

Market declines were limited after National Treasurer Omar Cruz yesterday confirmed the value-added tax increase would be implemented in January, easing concern about a delay in the government’s financial reform program.

Ayala Corp., owner of the nation’s largest developer and No. 2 banking and phone companies, rose P5, or 1.6 percent, to 312.50. JG Summit Holdings Inc., owner of the No. 2 food and beverage and shopping mall companies, added 10 centavos, or 2.7 percent, to P3.75.

Cruz’s statement came a day after Secretary Gary Teves said the tax increase may be delayed to March, a move which may have slowed efforts to narrow the budget deficit. – AFP