US sub-prime fears rear head anew, stocks down

11/21/2007

The stock index closed 2.9 percent lower on Tuesday as investors unloaded risky assets following overnight losses on Wall Street, dealers said.

They said Asian markets tracked losses on Wall Street following more bad news about the US banking and housing sectors.

The composite index closed down 104.61 points at 3,540.61 off a low of 3,506.67. This is its worst finish in nearly two months. The broader all-share index fell 59.26 points or 2.7 percent to 2,163.73. Decliners overwhelmed advancers 126 to 10, while 38 stocks were steady.

Volume amounted to 2.8-billion shares worth P4.2 billion.

“At this point, there’s no need to talk about attractive valuations,” Jonathan Ravelas of Banco de Oro-EPCI Inc. said.

“There’s renewed risk aversion and if you can’t stand the heat, get out of the kitchen,” he said.

“The liquidity squeeze is likely to become a more serious global problem in coming months,” Ravelas added.

Almost all of the key index-linked stocks came under strong selling pressure, with market leader Philippine Long Distance Telephone Co. down 65 pesos at 3,015.

In the financial sector, heavyweight Bank of the Philippine Islands (BPI) fell 3.50 to 61 while Metropolitan Bank and Trust Co. (Metrobank) shed 3.0 to 52.

Megaworld Corp. led losses in the property sector, with the stock down 10 centavos at P3.95. Ayala Corp., the country’s largest conglomerate, fell P10 to 570.

Food and beverage group San Miguel Corp.’s A-shares, limited to local investors, ended down 1.0 at 49.50. Its B-shares were 2.0 lower at 50.

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