Philippine Stocks Suffer in Wake of Typhoon: WSJ The Philippine stock market opened at its lowest level in six weeks on Monday as investors gauged the economic impact of Super typhoon Haiyan even as rescue and cleanup crews assessed the human toll. For the countrys largest ever initial public offering, the first trading day after the strongest typhoon to make landfall this year proved ill-timed for a debut. Robinsons Retail Holdings Inc., an operator of retail stores in the Philippines including Topshop and Toys R Us, fell 5.4% on its first day of trading, with shares changing hands around 55 Philippine pesos ($1.28), down from its IPO price of 58 pesos. The benchmark PSE Composite fell for the seventh straight session, losing 2.4% in its first hour of trading before recovering to trade down 1.8% by midday as large-cap companies including , including LT Group Inc., down 5.4% and Globe Telecom Inc., which lost 4.6%. The stock index is now down more than 5% in the month to date, nearly erasing the markets 6.5% gain in October. The countrys currency, meanwhile, is down 0.5% against the dollar, on track to notch its biggest fall since late September. The toll Supertyphoon Haiyan is taking on lives and economic activity is huge, said ING analyst Joey Cuyegkeng, who noted that the central Philippines, where the storms devastation was the worst, accounts for 12.7% of the countrys economic activity and contributes to tourism, manufacturing, commerce and power generation. Haiyan, known locally as Yolanda, made landfall on Friday, striking hardest in Leyte province, around 850 kilometers southeast of Manila. The official death toll remains in the low hundreds but is expected to rise considerably as rescue efforts accelerate and the government deploys special-forces troops in the region. Philippine investors may remain cautious in the short term, both because of damage caused by natural disasters, but also developments in the U.S., Mr. Cuyegkeng said, referring to renewed speculation about when the U.S. Federal Reserve may scale back its asset purchase program. Stocks could fall further as the trading day progresses. We think there are many long holders of Philippines equities in Europe, so we may get a better idea when London gets in later this afternoon, said Mohammed Apabhai, head of trading strategies in Asia for Citibank, which said it would donate to the rescue effort. Jeff Ng, an economist at Standard Chartered in Singapore, said the storm will likely have an effect on economic growth, but it happened in the peripheral regions, so the impact is going to be more minimal than if the storm had struck closer to an urban center like Manila, he said. Furthermore, the government will be making expenditures on reconstruction, which could act as stimulus, he said. Meanwhile overseas Filipinos may send more money home to help their families, which could further cushion the economic blow, he said. Standard Chartered is unlikely to adjust its projections for economic growth as a result of the storm, Mr. Ng said.
Posted on: Mon, 11 Nov 2013 04:40:00 +0000
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