By Victor V. Saulon

MANILA WATER COMPANY, Inc. took a beating at the stock market on Tuesday and fell by 35.76% to slip below its debut price as the concessionaire for Metro Manila’s east zone faced an uncertain future after the government moved for a review of supposed onerous terms in its contract.

“MWC (Manila Water’s stock symbol) went below its IPO (initial public offering) price today of P6.50 for the first time since 2005,” said Christopher Mangun, head of research at AAA Southeast Equities, Inc.

Mr. Mangun said Manila Water’s slide to P6 per share by the end of trading on Tuesday wiped out about P25.2 billion from its market value.

The company’s shares opened the day slightly weaker at P9.30 apiece from Monday’s P9.34 closing price, hit an intraday high of just P9.31 but fell to as low as P5.01 each — way below its 52-week low of P9.01.

Luis A. Limlingan, business development head at Regina Capital Development Corp., has been counting Manila Water’s losses.

“As we speak, MWC is the hardest hit today, down more than 40%,” he said.

Mr. Limlingan said the company’s market capitalization was at around P11 billion yesterday, adding that if it were to end at around the price it was trading late on Tuesday, then it would have lost another P7 billion.

“I think investors are liquidating as fast as possible based on the spike on trading activity,” he said.

Manila Water and west zone concessionaire Maynilad Water Services, Inc. were accused of economic sabotage by President Rodrigo R. Duterte after the former disclosed on Nov. 29 that it had won P7.39 billion in an arbitration case with the government.

The international arbitration came after the Ayala-led company called on the government to honor its pledge to reimburse foregone operating revenues arising from a significant reduction in the rate of return committed in its concession contract.

Separately, Maynilad was granted by a Singapore tribunal on July 24, 2017 an arbitral award of at least P3.42 billion for losses resulting from the refusal of the Metropolitan Waterworks and Sewerage System (MWSS) to implement the concessionaire’s water tariffs.

On Tuesday, Manila Water’s parent firm Ayala Corp. managed to end the trading on a positive note as it gained 1.06% to close at P760 apiece, so did Maynilad’s parent Metro Pacific Investments Corp. whose price gained 4.59% to close at P3.19 per share. In contrast, shares of DMCI Holdings, Inc. dropped by 2.52% to P5.41 each.

“These three companies have been sold off heavily in the last two weeks due to the uncertainty of the future of the water concessionaires,” Mr. Mangun said, referring to Manila Water, Metro Pacific and DMCI Holdings.

DMCI Holdings has a 25.24% stake in Maynilad, which is led by MPIC, with a stake of 52.8%. Japanese firm Marubeni Corp. has a 20% stake in the utility, while the balance is held by other shareholders.

Metro Pacific is one of three Philippine subsidiaries of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains interest in BusinessWorld through the Philippine Star Group which it controls.

Mr. Mangun said Metro Pacific has so far lost P37.5 billion in value, while DMCI Holdings has lost P14 billion.

He said Ayala Corp. was also affected because it derives about 5-10% of its net income from Manila Water.

“Investors may avoid the water concessionaires but pick up the conglomerates as prices are extremely depressed,” Mr. Mangun said.

Harry G. Liu, president of Summit Securities, Inc., said investors are unable to understand where Manila Water and Maynilad are heading.

“We know there are negotiations,” he said, referring to a call from the government to sit down with the companies and review the terms of the concessionaires’ contract.

“But we don’t know if the terms would be acceptable to the present suppliers. We also don’t know what the government wants to change,” he added.

“The government wants to do what is right, but the people running the water supply also want to make sure that they go to business and make money too.”

He said both sides have to arrive at a “win-win situation.”