Shares drop as investors pocket gains from rally

By Arra B. Francia, Senior Reporter

LOCAL EQUITIES dropped on the first trading day of September as investors went profit taking amid a lack of catalysts.

The 30-member Philippine Stock Exchange index (PSEi) retreated 0.76% or 61.13 points to close at 7,918.53 on Monday, while the broader all-shares index also fell 0.24% or 11.89 points to 4,797.59.

“The start of September ended lower than its end of August closing. Actually, this is expected since month-end window dressing and the rally for the past three days signalled investors to take profit,” Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said in a text message.

“This shows that investors are still on risk-off sentiment, as evidenced also by lower than average value turnover of only P5 billion compared to P7-8-billion average turnover.”

Mr. Tan added that there was a lack of catalysts given uncertainties from the US-China trade war. The US imposed 15% additional tariffs on $300 billion worth of Chinese goods on Sunday, Sept. 1, in response to China’s move to impose more duties on $75 billion worth of American imports.

“Yesterday was the first day of September, meaning the 15% tariff on the Chinese goods kicked in. This is something consumers can expect to feel when buying everything from milk to diapers to some China-manufactured tech products like the Apple Watch,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile phone message on Monday.

Mining companies rallied, with the mining and oil counter soaring 11.51% or 949.95 points to 9,200.47. Nickel Asia Corp. was the most actively traded stock on Monday, jumping 50% to P4.11 each, while Global Ferronickel Holdings, Inc. also firmed up 14.29% to P1.68 each.

This came after Indonesia said it will start banning nickel ore exports, in an effort to produce its own resources at home. Nickel Asia said it may book windfall gains from the supply disruption that will keep nickel prices high.

Meanwhile, the five other sectoral indices moved to negative territory, led by financials which lost 1.61% or 29.66 points to 1,803.62. Industrials shed 0.84% or 93.92 points to 11,032.38; services slumped 0.61% or 9.93 points to 1,613.82; holding firms slipped 0.52% or 41.70 points to 7,881.16, while property was down 0.16% or 6.72 points to 3,991.28.

Foreign investors turned net sellers at P665.19 million, compared to Friday’s net buying figure of P409.13 million.

Turnover stood at P5.27 billion after some 1.95 billion issues switched hands, lower than the previous session’s P9.74 billion.

Advancers outpaced decliners, 110 to 94, while 43 names were unchanged.

US stock markets are closed on Monday for Labor Day.