THE stock market, a barometer of corporate performance, lost 42.9 percent of its value this year due to heavy selling from foreign investors hit hard by the global financial crisis.
Statistics from the Philippine Stock Exchange show that the market’s total market value as of Dec. 24, the last trading day of the year, totaled P763 billion, down from P1.338 trillion at the end of December 2007.
Foreign buying declined 50 percent, to P335.3 billion from P680.3 billion, as foreign funds managers were forced to sell their shareholdings in most Asian countries to raise much needed capital for their parent firms in the United States and Europe.
The Philippines is believed to be one of the countries that will be least affected by the global financial meltdown, but analysts said foreign investors have had to reduce their exposure in Asian markets because of it.
As a result, the index ended 48.3 percent lower this year, at 1,872.86 against last year’s close of 3,621.6. All sub-indices including financial, industrial, property, mining and oil closed lower compared to a year ago.
The property and financial sectors were among those severely hurt.
The property index shed 57.5 points to close at 623.77 from 1,470.67, and on fears home sales to Filipinos working abroad would slow down because of the economic crunch.
As a result, the share prices of property developers led by Megaworld Corp., Robinsons Land Corp., Ayala Land Inc. and Filinvest Land Inc. all registered a decline.
Megaworld closed at P0.66 a share, down 824 percent from its 2007 close of P3.75. Ayala Land was down 55 percent to P6.40 from P14.24.
Bank shares, led by Banco de Oro Universal Bank, also took a beating.
BDO was down 60 percent to P24 from P60.50 a year ago. Metropolitan Bank and Trust Co. ended at P23, down 57 percent from last year’s close of P54.50.
Other banks whose share prices dropped significantly this year were the Lucio Tan-owned Philippine National Bank, the Yuchengco-owned Rizal Commercial Banking Corp., and the Ayala group’s Bank of the Philippine Islands.
Lopez-owned stocks were among the worst performers in 2008 despite their holdings in power generation and utilities—sectors that analysts said would perform well during an economic crisis.
The share price of Energy Development Corp. ended the year at P1.90 from P6.50 in 2007, while First Gen closed at P9.80 from P59.50.
First Philippine Holdings Corp. plummeted to P15.25 from P73.50, while Manila Electric Co. closed at P59.50 from P82.50.
Only a handful of stocks managed to post gains.
Remittance company iRemit Inc. ended the year at P4.95 from P4.75. The government earlier said it expected dollar remittances from overseas Filipinos to continue to grow next year despite the financial crisis.
Only two companies braved the crisis to make an initial public offering: Pepsi Cola Products Philippines Inc. and San Miguel Brewery Inc., the beer unit of food and beverage giant San Miguel Corp.
Only San Miguel Brewery, which controls over 95 percent of the local beer market, managed to close the year above its IPO price. San Miguel Brewery ended the year at P8.30, slightly higher than its offering price of P8 a share.
Pepsi Cola dipped to P0.85 from its IPO price of P3.50 a share.
Comment:
Due to the volatile markets all over the world and the deflation that is occuring in the US, the local markets are also experiencing unsurety. This further aggravates the need to start hedging ourselves through precious metals, either held physically or through a storage account.
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