(UPDATE) RP shares close 0.3 percent lower

ABS-CBN News

Posted at Jul 22 2008 02:59 PM | Updated as of Jul 22 2008 10:59 PM

Share prices retreated on Tuesday as investors cashed in on gains following an upturn during the previous session.

The composite index fell 6.64 points or 0.3 percent to 2,409.98.

The broader all-share index lost 2.22 points or 0.15 percent at 1,528.74.

Losers outnumbered gainers, 54 to 35, while 53 stocks were unchanged.

Volume remained thin with only 2.1 billion shares worth P1.5 billion traded.

Analysts said most investors remained sidelined on persistent worries over high inflation as oil prices started to edge up again.

Crude oil gained $2.16 to settle at $131.04 per barrel on the New York Mercantile Exchange overnight after declining more than $16 last week.

"Uncertainties remain. We don't know if the fall in oil prices would be sustained but so far, it seems that it was only a correction. Oil prices are still expected to rise further over the long term, which means that the country is still likely to experience high inflation," said Astro del Castillo, First Grade Holdings managing director.

The central bank has just confirmed that inflation would stay in double digits this year before easing in the first quarter of 2009. Last week, it raised its benchmark interest rates by half a percentage point, the second increase in a row, to combat inflation that has so far hit 11.4 percent in June.

But the Asian Development Bank (ADB) on Tuesday urged central banks across the region to take more decisive moves in tightening monetary policies to fight inflation.

The ADB scaled down its aggregate growth forecast for Southeast Asian nations, including the Philippines, to 5.5 percent this year.

Del Castillo said investors were also awaiting the release of more corporate financial results for the previous quarter.

"Majority of companies are expected to post lower earnings given that oil prices really hit highs during the second quarter. And again, looking forward, growth prospects remain gloomy."

Market heavyweight Philippine Long Distance Telephone Co. retreated P5.00 or 0.2 percent to P2,410.00.

Ayala Corp., the country's oldest and most diversified conglomerate, dropped P5.00 or 1.9 percent to P262.50.

Geothermal firm PNOC Energy Development Corp. edged down P0.05 or 1.1 percent to P4.55 after it reported a 38.6 percent drop in first-half earnings to P2.46 billion. For the second quarter, the company's profit fell 54 percent year-on-year to P1.26 billion.

Meanwhile, some companies ended higher during the session.

Property giants Ayala Land Inc. and Megaworld Corp. rose P0.10 or 1.2 percent to P8.70 and P0.04 or 3.4 percent to P1.22, respectively.

Petron Corp. climbed P0.10 or 1.7 percent to P6.00. London-listed Ashmore Group now owns 50.57 percent of the oil refiner after buying Saudi Aramco's 40 percent stake and another 10.57 percent from small shareholders.

Petron told the bourse that Ashmore purchased a total of 990.98 million Petron shares from small investors at P6.531 each between June 16 and July 14. The tender offer price was equivalent to the price paid for the shares from Saudi Aramco.