Shares close 0.3 percent lower

ABS-CBN News

Posted at Jun 04 2008 01:41 PM | Updated as of Jun 04 2008 09:41 PM


Agence France Presse


MANILA - Share prices closed down 0.3 percent Wednesday amid caution ahead of the release of May inflation data that could force the central bank to raise interest rates, dealers said.

The May consumer price index will be released on Thursday, a few hours ahead of the central bank's monetary board meeting.

The composite index lost 9.68 points to 2,773.12 after trading in a narrow range between 2,768.33 and 2,786.20.

The all shares index lost 1.82 points to 1,723.91. There were 35 advancers, 48 retreated and 66 were flat.

Turnover rose to 2.3 billion pesos (52.8 million dollars) from 1.97 billion pesos on Tuesday.

"The market is trading cautiously and some investors are reducing positions ahead of tomorrow's inflation figures and central bank meeting," analyst Lawrence de Leon of Accord Capital Equities told AFP.

"There is some reduction of positions of investors and (they are) trading cautiously on expectations that inflation will not be encouraging," he said.

The central bank warned last week that inflation could have spiked further to 9.6 percent in May compared to a year earlier, after jumping to a three year-high 8.3 percent in April due to rising food and energy prices.

De Leon said there was a "good chance they (monetary board) may hike rates which would be a bad sign for property and interest rate-sensitive issues."

The central bank has kept the overnight borrowing rate at 5.0 percent and overnight lending rate at 7.0 percent at the last two meetings after slashing the rates by a total 100 basis points between October 2007 and January 2008.

Ayala Corp. led the retreat, closing 2.2 percent down to 327.50 pesos. Ayala Land however rose 2.4 percent to 10.50 pesos.

Philippine Long Distance Telephone dropped 0.4 percent to 2,560 pesos.

San Miguel A and B shares were unchanged at 41 and 42 pesos respectively.

The peso traded at an average of 43.841 to the dollar in the morning.