Friday, July 18, 2008

Shares flat as players expect more rate hikes

07/18/2008 | 12:51 PM

MANILA, Philippines - Philippine share prices on Friday ended flat following the decision of the Bangko Sentral ng Pilipinas (BSP) to hike lending rates to tame rising consumer prices.

Investors based their position on expectations that the BSP will further lift rates to control inflation, analysts said.

The 30-company Philippine Stock Exchange index dropped 4.10 points or 0.1713 percent to 2,389.52 while the all-share index gained 0.95 points or 0.0627 percent at 1,516.83.

Losers edged out gainers 41 to 40 while 50 stocks were unchanged.

Volume traded reached 1.472 billion valued at P2 billion.

Astro del Castillo, First Grade Holdings managing director, said although investors found relief in stabilizing oil prices, the BSP’s move to hike rates by 50 basis points drew off funds from the equities market.

“(Thursday’s) increased in rates siphoned liquidity from the market," he said.

Lawrence de Leon, Accord Capital trader, said the rally in Wall Street lifted local sentiments but early gains on Friday’s sessions were erased on expectations of more rate hike from the BSP before the year ends.

“The market rally in the US helped boost local sentiment early in the session but it was later taken over by sellers expecting more future rate hikes by the BSP," de Leon said.

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