Philippine stocks retreat on concerns about typhoon Haiyan effect

The Philippine stock market further retreated on Monday over concerns on the effect of Super Typhoon Haiyan (local codename: Yolanda) to the Philippine economy. The bellwether Philippine Stock Exchange index dived by 1.42 percent or 89.95 points to 6,265.23, while the all-share index slipped by 51.72 points, or 1.33 percent, to 3,825.18. Trading volume reached 0.65 billion shares worth 9.51 billion pesos (219.98 million U.S. dollars). Losers beat gainers 107 to 34 while 43 stocks closed flat. "Share prices tanked dragged by concerns over the impact of typhoon Yolanda (Haiyan) on the broad economy despite a rebound of its peers in the region and a surge in the U.S. equities last Friday," analyst Justino Calaycay of Accord Capital Equities corp. said in his daily stock market comment. The Philippine economy, which has been a sort of a bright spot in the global picture, is expected to sustain the momentum of the last six quarters with the last four running at above 7.0 percent pace. The concern, however, focuses on the potential impact on the fourth and final quarter -- historically one of, if not the strongest periods, particularly for consumption. "Agriculture will be the hardest hit in the aftermath of Yolanda's wrath. The sector however account for no more than 10 percent of gross domestic product," he said. As the market continues to drop, optimism in equities fades, especially after sitting through a full-week of decline. Monday's drop marked the seventh consecutive days of the market's bloodbath. Right now, Calaycay said there seems not much news that could boost the market. At the core of the apprehension to the local equities is the over-arching attention paid to the U.S. Federal Reserve stimulus program. "Admittedly, a large part of the sudden rise in emerging market equity values arose out of the surge of liquidity that searched for better yields as the expansionary mode of monetary authorities in advanced economies squeezed returns on fixed-income financial assets," he said. Stocks in the 30-company index were mostly down. These issues include conglomerate Ayala Corp. and bank Asia United Bank.