Stocks extend decline on Ayala group’s woes
By Denise A. Valdez, Reporter
THE MAIN INDEX continued its decline on Tuesday due to regulatory risks that are hounding the Ayala group.
The benchmark Philippine Stock Exchange index (PSEi) gave up 85.95 points or 1.13% to close at 7,466.65 yesterday, while the broader all shares index lost 39.56 points or 0.88% to 4,434.71.
“The market breached the 7,500 level despite foreigners becoming net sellers today, mainly due to index heavyweights AC (Ayala Corp.) and ALI (Ayala Land, Inc.) dragging the market with them as investors continued their selloffs because of President Duterte’s tirades against them over the weekend,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message on Tuesday.
ALI and AC were two of the most actively traded stocks on Tuesday, with shares in each losing 2.47% and 4.67% at the close of the market, respectively.
This follows the government’s threat of probing the contract between ALI and the University of the Philippines for UP-Ayala Land Technohub in Quezon City due to alleged underpayment.
ALI said it is open to any review of the partnership, but it claims it is paying UP P171 per square meter per month, contrary to the statement of Presidential Spokesperson Salvador S. Panelo that the company is paying less than P20 per square meter.
Another factor that affected the market’s decline was Moody’s lowering of its ratings for Hong Kong to AA3 from AA2 amid concerns of political unrest due to continuous protests in the region.
“Philippine shares became collateral damage from Moody’s downgrading HK rating to AA3 from AA2 but changed outlook to ‘stable’ from ‘negative,’ citing the absence of tangible plans to address the concerns of the people,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.
Other Asian markets also closed lower yesterday: Japan’s Nikkei 225 and Topix indices fell 0.91% and 0.53%, respectively, Hong Kong’s Hang Seng index collapsed 2.81%, China’s Shanghai SE Composite index slumped 1.41% and South Korea’s Kospi index shed 1.01%.
Back home, all sectoral indices remained losers, led by financials which dropped 28.55 points or 1.56% to 1,797.19. Holding firms declined 96.14 points or 1.31% to 7,214.76; services fell 14.22 points or 0.91% to 1,539.56; property reduced 25.68 points or 0.66% to 3,853.61; industrials erased 52.61 points or 0.56% to 9,313.72; and mining and oil decreased 15.51 points or 0.19% to 8,029.73.
Some 741.11 million issues valued at P7.76 billion switched hands yesterday from the 913.66 million issues worth P6.28 billion seen on Monday.
Decliners reached 132, outpacing advancers which stood at 67, while 38 names ended unchanged.
Foreigners turned bullish to record net purchases of P422.45 million, a turnaround from Monday’s net foreign selling of P512.9 million.