MANILA - Share prices closed 1.37% lower on Thursday as investors dumped their holdings, particularly in power distributor Manila Electric Co. (Meralco), to lock in profits after the previous session's rally, dealers said.

The composite index rose 38.41 points to 2,764.98 while the all-shares index gained 1.43% to 1,755.69.

A total of 2.43 billion shares worth P3.92 billion ($81.42 million) were traded.

Decliners beat gainers, 78 to 41, while 45 issues closed unchanged.

The peso was at 48.14 to the dollar in early trade.

"Investors are running for safety. Rotational buying limited the market's decline," James Lago of PCCI Securities Brokers told Dow Jones newswires.

Blue chip Meralco led the day's losers, dropping 18% to P241. Cushioning the decline were gains in Philippine Long Distance Telephone Co. and Bank of the Philippine Islands, which rose 2.9% to P2,500 and 1.1% to P45, respectively.

Meralco shares zoomed to record-highs in the previous days on speculation that one of its 2 key shareholders would offer to buy the other out, setting off a tender offer.

On Wednesday, Meralco closed up 8.3% or P22.50 to P295, its best level since the company's shares were first sold to the public in 1992. With a report from AFP