Shares higher in mid-trade on falling oil prices

MANILA, Philippines -- Shares were higher halfway through Wednesday's session as falling oil prices encouraged bargain-hunting in blue chips.

At 10:35 a.m. (0235 GMT), the 30-company composite index was up 31.19 points or 1.3 percent to 2,441.17.

The broader all-share index advanced 16.41 points or 1.1 percent to 1,545.15.

"The rally is being underpinned by falling oil prices, it could be in the process of getting the air out of that bubble," said Francisco Liboro, president of PCCI Securities.

"If prices drop below $120 a barrel, it's confirmation of the bubble bursting."

Light, sweet crude for August delivery was down $3.09 to $127.95 a barrel on the New York Mercantile Exchange Tuesday amid a perceived decline in US oil demand and expectations that a hurricane coursing through the Gulf of Mexico would spare most offshore oil production there.

The closing price was nearly $20.00 down from a record high of $147.27 in recent weeks.

"The recent hefty oil price drop eases pressure on the economy. It is going to be very beneficial for companies and the economy, in general, if the decline would be sustained in the next few days. It will boost optimism that the uptrend (in oil prices) has been broken," said PCCI's Liboro.
"The question is how much volume there is in the (stock) market. A bigger volume means investors are convinced it is worth re-entering the market."

Soaring oil prices have hit the Philippines hard as the country imports nearly all of its oil requirements.

The Philippine central bank has warned inflation may remain at double-digit levels this year due to escalating food and energy costs, before it eases in 2009. The bank raised key interest rates last week by half a percentage point, the second increase in two months, to combat inflation, which hit a 14-year high of 11.4 percent in June.

Index leader Philippine Long Distance Telephone Co. gave up early gains, shedding 0.4 percent to P2,400.

Conglomerate Ayala Corp. rose 1.9 percent to P267.50.

Financial issues led advancers, with second-ranked Banco de Oro Unibank rallying 5.4 percent to P39.

Bank of the Philippine Islands, the country's third largest bank climbed 3.9 percent to P40.50. Top-ranked Metropolitan Bank and Trust Co. jumped 4.7 percent to P33.50.

Among property stocks, Megaworld Corp., the nation's second biggest property developer, surged 6.6 percent to P1.30.

($1 = P44.40)