Philippino sell-off after failed revolt
THE
In keeping with that unfortunate tradition, there was a knee-jerk sell-off today after 300 renegade soldiers staged an abortive mutiny in Manila at the weekend.
The Philippines Composite slumped more than 4% at the opening bell, before recouping some of its losses to trade down 27.04 points, or 2.1%, at 1256.71. The local currency, the peso, was also sold off.
Brokers said the 19-hour stand-off had understandably bruised investor sentiment and brought a host of fears about the stability of the government back to the surface.
Although President Gloria Macapagal Arroyo survived this scrape as other military units failed to rally to the rebels' cause, the flap underscored the povertywracked country's potential for political turbulence. Market-watchers added that some of today's weakness also came as funds may have opted to lock in profits, while they considered switching their attention to other regional bourses.
Like its unfashionable peer Indonesia and its more-glamorous counterpart Thailand, Manila has seen its stocks do well so far this year on hopes for a global economic revival in the second half. The local lead index has climbed by close to a third since it bottomed out below 1000 points in March.
Ratings agency Standard & Poor's played down the uprising, which ended without a shot being fired after troops returned to their barracks and their five leaders agreed to face a military tribunal.
'Judging by the public information, the political issues are relatively minor,' Takahira Ogawa, S&P's director for Asia-Pacific sovereign ratings said. But the Philippines has a track record of springing surprises and its convoluted, rumour-rich political system means that the driving force behind events is rarely fully clear.
The rebels had claimed that Arroyo's team was corrupt - not a novel accusation in Manila - and that she planned to declare martial law next month to extend her term in office beyond elections slated for 2004.
Leading today's falls, Philippine Long Distance Telephone, the country's largest phone company, fell 4.6% to 520 pesos, rival Globe Telecom was 3.7% lighter at 655 pesos, and property developer Ayala Land declined 1.5% to 6.6 pesos.
Elsewhere the picture was brighter, buoyed by the advance of US equities last Friday after macro-economic indicators fed investors' belief in a sustained upturn in the current half. Tokyo's Nikkei 225 put on 191.90, or 1.99%, to 9839.91.
Standing out was chip test equipment maker Advantest, which said it had avoided red ink for the first time in two years. Its shares added 190 yen to 6580 yen, better by 3%.
Plant maker Komatsu was 26 yen, or 4.5%, higher at 602 yen on hopes for stronger demand for its products.
Hong Kong also took its lead from Wall Street as the Hang Seng rose 195.7 points to 10,134.9. Clothing retailer Esprit was 45 cents, or 2.5%, higher at HK$2.85, while giant lender HSBC put on HK$1.25, or 1.3%, to HK$95.50.
South Korea's SK Telecom rose 3.9% to 200,000 won on expectations of decent second-quarter numbers on Thursday. The Composite was up 12.57, or 1.8%, at 717.67.
