Economy still Stable after Makati Siege

Nov 30, 2007 (The Manila Times - McClatchy-Tribune Information Services via COMTEX) --
Despite the market jitters brought about by the siege of a five-star hotel in Makati by disgruntled soldiers, Philippine stocks closed slightly higher on Thursday because of bargain hunting.

As the story developed, local traders said they hoped the siege will be quickly resolved. Meanwhile, the peso closed stronger on Thursday at P42.750 against the US dollar, which appreciated compared with P42.860 on Wednesday.

The local bourse opened on strong note as Wall Street posted its highest two-day rally in five years with the Dow Jones Industrial averaging up by 313 points on the back of the possibility that the US Federal Reserve will cut interest rates before the year ends to keep the US economy from further sliding down.

The early morning rally at the Philippine Stock Exchange, however, was short-lived as traders started selling after news broke out that soldiers led by Sen. Antonio Trillanes 4th and Army Brig. Gen. Danilo Lim, stormed out of a Makati City courtroom, holed up at the Manila Peninsula Hotel and called for the ouster of President Gloria Arroyo.

"[Traders] got nervous and began selling, but before that the market was up by about 100 points," said Astro del Castillo, First Grade Holdings managing director. "It was a knee-jerk reaction. But they started buying at the last minute."

"They realized that it was an overreaction, and it was an irrational mass selling so [traders] decided to buy again. Another factor was the good GDP [gross domestic product] growth report earlier that served as an assurance for the long-term prospects of the country," Jan Michel Acebo, First Metro Securities analyst, said.