Weak Peso Drives Shares Lower
May 16, 2011
The Philippines Stock Exchange Index of 41 selected issues fell 41.5 to 3207.89. Losers outnumbered gainers 77 to 27 while 76 issues were unchanged. Volume thinned to 9.26 billion shares valued at 1.44 billion pesos. Ayala Land had a major impact on the index when it tumbled 1 peso to 33.50 pesos after rising steadily in recent sessions. Its parent company, Ayala Corp.'s Class B shares were another loser, sliding 50 centavos to 30.50 pesos. ``Foreign fund managers are wary about a peso depreciation. They want to see support from the central bank,'' said Novella Crystal, institutional sales dealer for Philippine Asia Equity Securities. The U.S. dollar has been climbing against the peso since Monday as interest-rate arbitrageurs and other fixed-income investors left the market in anticipation of a further decline in interest rates and stricter tax enforcement on reverse repurchase instruments. The central bank has been able to push the dollar back slightly by unloading as much as $120 million on Monday and another $27 million early Tuesday.
