PHILIPPINE STOCK EXCHANGE SAYS LOCAL MKT SHIELDED FROM US MKT

MANILA, Oct 02, 2008 (AsiaPulse via COMTEX) -- PSKXF | Quote | Chart | News | PowerRating -- The Philippine stock market index has recorded one of its biggest single day turnarounds after it clinched a 122.46 point recovery from a 160 point drop within four minutes upon opening of trading in Tuesday.

The Philippine Stock Exchange (PSE) said that the PSEis five percent gain at 2,569.65 points upon closing, compared to its lowest value of 2,447.19 points during early trading, is the highest single day recovery of the PSEi since January 22, 2001.

Francis Lim, president and chief executive officer of PSE, said the 122.46 point-turnaround represents the second biggest intraday recovery points-wise since November 6, 2000.

"Everyone expected a huge drop in the index considering how the US stock market dropped in Tuesdays trading. But what pleasantly surprised us was the way the market recovered," Lim explained.

"You see, the index lost 108.68 points when the market opened and this slid further to 160 points. But the negative market sentiment wore off as the main index slowly inched upwards to finally close at 2,569.65 points," he added.

He said the good performance only shows that our stock market stands on solid fundamentals,"which should pacify investors impulsive response on our local stock mart."

On Tuesday (Manila time), the United States Congress failed to pass the financial system bailout package presented by the Bush administration that pulled the Dow Jones industrial average to a downward spiral shedding a record-high 777 points upon close of trade on the very same day.

Likewise, the main stock index of the Ho Chi Minh Stock Exchange in Vietnam suffered the biggest loss as it closed 4.7% lower from its previous close. The key stock indices at the Tokyo and Taiwan Stock Exchanges followed losing 3.6% of their previous days closing levels.

On the other hand, the main indices at the Stock Exchange of Thailand, Korea Stock Exchange, Singapore Stock Exchange and Bursa Malaysia followed the same trend as the PSEi by recovering their early days losses and posting modest declines of 0.8%, 0.6%, 0.1% and 0.1%, respectively, at the end of trading.

"Panic selling is one of the biggest challenges, particularly for small markets like the Philippines," Mr. Lim said.

"I am glad that the cooler heads among our investing public prevailed in Tuesdays trading," he added.

Because of this, Mr. Lim reiterated the need to institute critical reform measures to develop the local capital markets.

"As I explained in the recently held Senate committee hearing on the current global financial turmoil, the smaller and underdeveloped markets are more susceptible to volatilities during financial turmoil and we saw this taking place during the early minutes in Tuesdays trading. Hopefully, as our government gradually institute reforms that will further enhance our capital market, we can see less of these kinds of wild volatilities in the market," Mr. Lim said.

(PNA)

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