Stock Market

Stocks decline as miners reel from DENR order

Posted on February 03, 2017

LOCAL STOCKS mostly headed south after the Department of Environment and Natural Resources’ (DENR) order to close 21 mining operations shocked investors that chose to brave the uncertainties over the policy moves of US President Donald J. Trump rather than stay on the sidelines.

The Philippine Stock Exchange index (PSEi) closed almost unchanged at 7,225.91 on Thursday. The benchmark nevertheless extended its retreat by 1.54 points or 0.02% for the third consecutive session.

The broader all shares index likewise shed 3.80 points or 0.08% to settle at 4,365.71 during another session of thin trading.

“You still see investors staying on the sidelines -- that’s why the value turnover was below average -- because the Chinese New Year just passed,” Aniceto K. Pangan, trader at Diversified Securities, Inc., said in a telephone interview.

“Aside from that, we have these uncertainties abroad, specifically the protectionist stance of President Trump that made investors to take on a wait-and-see attitude for other ‘America first’ policies he would be pushing through,” the trader added.

Investors only traded 2.13 billion issues worth P5.94 billion, up from the P5.11-billion worth traded the previous session but well below the P7-billion daily average.

“Philippine share prices were on a rather somber mood -- narrow trading band on thin activity -- as leads failed to stoke a strong reaction either way,” Justino B. Calaycay, Jr., head of marketing and research at A&A Securities, Inc., noted in a trading post.

The US central bank’s Federal Open Market Committee left interest rates unchanged when it concluded its monetary policy review on Wednesday. It, however, remained upbeat about the direction of the world’s largest economy.

Decliners outnumbered advancers, 102 to 80, while 44 stocks were unchanged.

Property advanced by 22.84 points or 0.69% to 3,293.46; financials by 6.42 points or 0.36% to 1,751.98; and industrials by 12.49 points or 0.11% to 11,003.05.

On the other hand, mining and oil dropped by 200.73 points or 1.65% to 11,951.84; holding firms by 42.90 points or 0.57% to 7,373.33; and services by 3.89 points or 0.27% to 1,408.97.

“The mining sector naturally succumbed to panic following the developments on DENR’s mining ban,” Frank Gerard J. Barboza, trader at AP Securities, Inc. said in a mobile phone message.

The negative sentiment toward mining stocks, however, failed to reverberate across the Philippine market, Mr. Pangan noted, as many investors opted to stay on the sidelines mostly because of uncertainties over policy changes in the US.

In previous sessions, investors were sidelined by the immigration ban ordered by Mr. Trump against certain countries. “That alone would tell you what kind of policies will he make going forward,” Mr. Pangan said, recalling that Mr. Trump also vowed to discourage American companies from outsourcing jobs during his presidential campaign. -- Keith Richard D. Mariano