Philippine shares lower in thin trade, Ayala Corp gains on share buyback

Philippine shares lower in thin trade, Ayala Corp gains on share buyback

	Published : Tue, 11 Sep 2007 04:47 By : Agencies Print this Story

MANILA (Thomson Financial) - Philippine shares were weaker in late trade Tuesday, with volumes thin as caution set in ahead of the Federal Reserve's interest rate-setting meeting next week and Wednesday's verdict on ex-president Joseph Estrada's corruption trial.

News that Philippine merchandise exports grew a little faster in July failed to lift investor sentiment, but conglomerate Ayala Corp's announcement of a 2.5-billion-peso share buyback program sparked some excitement in the stock.

At 11.12 am (0312 GMT), Manila's composite index was down 14.71 points, or 0.5 percent, at 3,266.37.

The all-share index fell 9.89 points, or 0.5 percent, to 2,069.90.

'Nobody is making any big moves ahead of the Fed meeting on Sept 18 and the verdict on Estrada tomorrow,' said Lawrence de Leon, an analyst at Accord Capital Equities.

'At this point, many investors believe that a Fed rate cut is a done deal because they think it's hard for the Fed to ignore recent data suggesting a slowdown in the US economy. But the question now is by how much the Fed is willing to slash the key rate.'

Shortly before the market opened, the National Statistics Office announced that Philippine merchandise exports grew 4.5 percent in July from a year earlier to 4.2 billion US dollars.

The growth pace was faster than the 1.5 percent rise in June, thanks to increased demand for electronics, but economists said it was still below their expectations.

'The Philippines may already be seeing the consequences of a US slowdown. Going forward, the country will have to derive more demand for its products from the Asian and European markets,' said Frances Cheung, an economist at Standard Chartered Bank in Hong Kong.

Index leader Philippine Long Distance Telephone Co extended its losses, down 10 pesos or 0.4 percent to 2,675 pesos.

Manila Electric Co, also known as Meralco, plunged 4 pesos or 5.1 percent to 75 pesos.

Bucking the trend in the broader market, Ayala Corp rose 7.50 pesos or 1.6 percent to 470 pesos after the company said it will buy back common shares equivalent to about 1.3 percent of its current market capitalization. The buyback price per share has not yet been announced.

(1 US dollar = 46.79 pesos)

enrico.delacruz@thomson.com

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