Philippine stocks fall on death of tourists
Philippine stocks fell, sending the benchmark index to its biggest loss in almost two weeks, after a bus siege in Manila ended with the deaths of at least eight tourists from Hong Kong.
The Philippine Stock Exchange Index slid 1 percent to 3,576.51 at 10:26 a.m, the most since Aug. 12. Declines were led by SM Investments Corp., owner of the nation’s largest shopping mall operator, and Alliance Global Group Inc., which has a casino-hotel resort complex.
Hong Kong urged tour groups in the Philippines to leave the country as soon as possible and advised citizens to avoid traveling there, after the bus was seized yesterday by a disgruntled ex-police inspector, who was killed by a sniper when officers stormed the vehicle.
“It’s unfortunate that this was resolved with violence,” said Jonathan Ravelas, strategist at Manila-based Banco de Oro Unibank Inc. “The market will have a short-term negative knee jerk reaction but that shouldn’t change its longer term upward direction.”
The benchmark index has rallied 17 percent this year and closed at its highest since January 2008 yesterday as the country’s expanding economy boosted the outlook for earnings. Gross domestic product grew 7.3 percent in the first quarter, the quickest since June 2007.
SM Investments, which also owns hotels, fell as much as 8.9 percent to 450 pesos before trading 0.8 percent lower. Alliance Global, Genting Hong Kong Ltd.’s partner in the Manila-based casino-hotel complex, sank 2.6 percent to 6.65 pesos, set for the sharpest loss since Aug. 12.
Police moved in to end the standoff after about 10 hours when shots were heard from the bus on which former senior inspector Rolando Mendoza was holding 15 Hong Kong tourists to protest his dismissal for extortion of a suspect.
The bloody ending to the siege was caused by the “mishandling” of the situation and not a breakdown in law and order, Philippine Tourism Minister Alberto Lim said.
“Manila is a safe destination and so are many other parts of the country,” Lim said in an interview with Bloomberg Television today. “This is an uncommon incident. It doesn’t happen every day.”
The Philippines attracted 2.7 million tourists last year, about 4 percent of all arrivals into the 10-member Association of Southeast Asian Nations, according to the bloc’s website.
JG Summit Holdings Inc., owner of the nation’s second- biggest carrier Cebu Air Inc., fell 1.6 percent to 18 pesos. Cebu Air has four daily flights to Hong Kong, the airline’s most popular overseas destination. The carrier said last week it plans to add one extra daily flight from November.