Shares decline on profit taking ahead of GDP

STOCKS plunged yesterday, as investors were taking profits ahead of the release of thirdquarter gross domestic product (GDP) today and due to lower remittance figures for September.

The Philippines Stock Exchange index ( PSEi) closed at 8,273.44 on Wednesday, down 106.20 points or 1.26%.

The all-shares index ended at 4,864.15, dropping 49.76 points or 1.01%.

“The index fell today after twenty- three out of the thirty blue- chip stocks ended in a bearish tone today with JGS (JG Summit Holdings, Inc.), SM (SM Investments Corp.), SMPH (SM Prime Holdings, Inc.), BPI (Bank of the Philippine Islands) and BDO (BDO Unibank, Inc.) leading the local bourse down. This selloff is mainly a result of profit taking ahead of the GDP release date on Thursday as well as the negative investor sentiment in the commodities market that rippled across Asian and European equities which triggered foreign investors to sell 649 million worth of shares in our market today,” Jervin S. de Celis, equities trader at Timson Securities, Inc., said in a text message on Wednesday.

The government will release GDP data for the third quarter today. Analysts expect the country’s overall economic growth to have stayed above 6% last quarter on the back of strong domestic demand and recovering merchandise exports, results of a BusinessWorld poll showed.

A poll of 11 economists and analysts late last week yielded a median GDP growth estimate of 6.6% for the third quarter, edging up from the second quarter’s 6.5% and January-March’s 6.4%, but slower than the 7.1% recorded a year ago.

Luis A. Limlingan, managing director at Regina Capital Development Corp., said investors were disappointed by the latest remittance figures.

“Philippine shares were sold down as investors were disappointed by the rather steep drop in the latest remittance figures of a little over -8% in September,” Mr. Limlingan said in a text message.

Money sent home by overseas Filipino workers totaled $2.186 billion for the month, dropping 8.3% from the $2.383 billion posted a year ago and the $2.499 billion that flew in August, the Bangko Sentral ng Pilipinas reported yesterday.

The amount is the lowest since the $ 2.083- billion remittances tallied in April, and is the steepest fall in over a decade or since a 10.9% drop in April 2003.

All sectors closed in the red. Mining and oil dropped 264.91 points or 2.11% to close at 12,248.92; holding firms went down 128.21 points or 1.49% to 8,467.75; property declined 49.10 points or 1.26% to 3,831.32; financials lost 19.74 points or 0.95% to end at 2,048.58; industrials gave up 91.16 points or 0.82% to finish at 11,002.97; and services slipped by 6.22 points or 0.37% to 1,652.80.

Value turnover dropped to P5.91 billion from Tuesday’s P8.88 billion, with 1.42 billion shares changing hands.

Decliners beat advancers, 109 to 76, while 53 names were flat.

Net foreign selling was recorded at P649.54 million, a reversal of Tuesday’s net purchases worth P55.46 million. •