SHARE prices recovered yesterday, gaining almost half of the 7.92 percent loss it suffered on Wednesday.

The 4 percent gain of the Philippine Stock Exchange index from 3,067.45 to 3,190.12 at yesterday’s close made the local stock market the recovery leader in the region. Indonesian stocks gained 1.06 percent and Thai stocks 0.75 percent.

While Wall Street recovered overnight, Asian stocks generally extended losses with most investors still edgy after many markets suffered their worst one-day drops on Wednesday since the Sept. 11, 2001 attacks.

The global stock market sell-off that started in China last Tuesday was likely to be temporary as the world economy remains healthy, the president of the Asian Development Bank said.

"I think it’s a short-term phenomenon," Haruhiko Kuroda, ADB president, said.

"I don’t think it would continue. And the global economy, particularly the Asian economy, is very robust, so it would not be affected too much," he said.

The ADB expects Asian economies, excluding Japan, to grow by an average of 7.1 percent this year from an estimated 7.7 percent in 2006.

This week’s downturn was triggered by factors ranging from a surprising dive in Chinese stocks to rising concerns about a US economic slowdown.

Stock market gains since the start of the year were wiped out on several major bourses.

The local recovery was led by index heavyweight Philippine Long Distance Telephone Co., gaining P100 to P2,420. PLDT is PSE’s most actively traded stock.

Gainers overwhelmed losers 105 to 22, with 45 issues unchanged.

Trading was strong at 12.16 billion shares amounting to P5.54 billion.

Traders consoled themselves with fact that what they had been expecting as a month-long consolidation happened in a flash.

Unfazed by the market’s biggest one-day fall in nine years, the PSE is pushing new listings, a stocks lending program and more online trading to increase liquidity, its president said.

Broadcast giant GMA-7 and Pilipinas Shell, the local unit of Royal Dutch/Shell, are looking to list this year along with a raft of other companies, said PSE president Francis Lim.

A program allowing shares deposited in custodian banks to be traded came into force two weeks ago, and Lim said he expected turnover to increase "between 10 to 50 percent" as a result.

The PSE is hoping to tap into the billions of dollars sent home each year by overseas workers by encouraging the growth of online brokerages, allowing expatriates to invest in shares back home.

"While we have grown in leaps and bounds, the sad reality is that we are still small compared with our neighbors," Lim said.

The average turnover on the exchange so far this year is about P4.7 billion ($98 million), more than double the 2006 average, but still dwarfed by Singapore at about $810 million, Indonesia, Malaysia and Kuala Lumpur.

Manila’s market capitalization is about $75 billion, against about $410 billion in Singapore, $260 billion in Kuala Lumpur and $135 billion in Jakarta.

"We have already grown respectably well in terms of percentage growth vis-à-vis our neighbors," Lim said. "The last leg is how to grow in terms of absolute dollar figures."

Still, the Philippine market has been one of the best performing in Southeast Asia this year, closely following Malaysia.

The market is up almost 7 percent this year, after a 42 percent gain in 2006. – Reuters