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Ayala firms spark sell-off; index tumbles

Wednesday, June 1, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]

BY KRISTINE JANE R. LIU, Reporter


SHARES of the Philippines’ oldest conglomerate Ayala Corp. and its property arm, Ayala Land, Inc., were dumped yesterday, sparking a sell-off, analysts said.

The benchmark Philippine Stock Exchange tumbled by 1.21% or 30.06 points to 2,437.99, while the all-shares index slipped by 1% or 15.87 points to 1,566.47.

A total of 1.23 billion shares worth P2.41 billion were traded with foreign buyers trumping sellers by P48 million.

Decliners swept advancers 61 to 31 while 50 stocks did not move.

"Ayala Corp. was one of the biggest contributors to the market’s decline yesterday. It started with the holding company and cascaded to the other stocks," Tristan E. Valerio of Lucky Securities, Inc. said.

The market opened at 2,476.62 or eight points up, touching a high of 2,482.11, until investors started cashing in gains.

"I guess it was just a case of profit taking dominating window dressing.

"[The Ayala companies] were the stocks the foreign investors were holding and naturally they were what they dumped," Joseph Roxas of Eagle Equities, Inc. said.

Ayala Corp. and Ayala Land were the biggest losers yesterday, the holding company tumbling by 4.5% or P12.50 to P265 on net foreign selling of P163 million.

Its property arm declined by 4.7% or P0.40 to P8.10 on net foreign selling of P60 million.

Affiliates Globe Telecom, Inc. and the Bank of the Philippine Islands slipped by 1.04% or P10 to P950 and 1.17% or 50 centavos to P42, respectively.

Claire S. Quiray of Regina Capital Development Corp. pointed out the local market was weak for the past couple of days.

Also, turnover has remained thin, indicating low market participation, while market rallies came on the back of select issues.

"There is always intra-day profit taking and this is tempering the rallies. The intra-day profit taking shows the market is struggling to hold on to its 2,400 support level because of the weak confidence of investors," Ms. Quiray said.

"Investors are waiting for share prices to go up but the market continues to move sideways. They feel therefore it is more prudent to lock in gains before they lose them especially since there is no news to compel them to put their money in the market."

Not one of the six subindices eluded the carnage.

Holding firms, which include Ayala Corp., dived by 2.7% or 36.07 points to 1,298.14 while property shares, which include Ayala Land, fell by 2% or 16.43 points to 802.46.

Industrial stocks slipped by 1.17% or 40.41 points to 3,397.68, while financial companies declined by 1.02% or 5.57 points to 538.90.

Mining and oil shares tumbled by 0.3% or 17.53 points to 5,730.23, while the service sector lost 3.22 points to 1,341.11.

Other blue chips, aside from the Ayala companies, saw their values slide.

Manila Electric Co. slipped by 2.79% or P4 to P139, while the Metropolitan Bank & Trust Co. declined by 1.56% or P0.50 to P31.50.

Index heavyweight Philippine Long Distance Telephone Co., on the other hand, did not move at P2,395.

Neither did Sy-led Banco de Oro Unibank, Inc., which remained at P31.50.

Andrew L. Tan-led Megaworld Corp., meanwhile, added 1.03% or a centavo to P0.98.

"Expect an anemic trading this week since there is no news locally and abroad that could influence investors," Mr. Valerio said.

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