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Main index drops as US-Iran tensions escalate

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PHOTO BY SANTIAGO J. ARNAIZ

THE MAIN INDEX returned to red territory on Wednesday after investors shied away from the market due to increasing tensions between the United States and Iran.

The Philippine Stock Exchange index (PSEi) lost 104.46 points or 1.33% to close at 7,736.24 on Wednesday. The broader all shares index likewise fell 52.77 points or 1.13% to 4,595.58.

“Iran fired missiles on two US army bases in Iraq, while gold surged as investors stayed in cash and safer haven assets with rising geopolitical tensions today,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message yesterday.

Iran fired a missile attack on two Iraqi military bases that housed US coalition troops on Wednesday morning, a retaliatory act following US’ killing of Iranian military commander Qassem Soleimani last week.

US President Donald Trump and Iraqi military initially claimed zero casualties from the attack, but the market was nonetheless down following the events.

For Diversified Securities, Inc. Equity Trader Aniceto K. Pangan, the decline in the local bourse on Wednesday was also affected by the stocks of water concessionaires.

“Market was down today…also (due to) the confusion on the government’s plan on how to remove the onerous provisions in the water concession agreement whether thru imposition or negotiation,” he said in a text message on Wednesday.

President Rodrigo R. Duterte said Tuesday he is offering new water contracts to Manila Water Co., Inc. (MWC) and Maynilad Water Services, Inc., which they have to accept, otherwise the government will take over the water distribution services in Metro Manila.

These contracts, Malacañang said, will not have the same “onerous” provisions that were in the previous water contracts of MWC and Maynilad.

Shares in MWC lost 66 centavos yesterday, while shares in its parent Ayala Corp. lost 10 centavos. For Maynilad investor Metro Pacific Investments Corp., losses reached eight centavos yesterday. DMCI Holdings, Inc., which is also an investor in Maynilad, meanwhile inched up two centavos.

Sub-sectors of the local bourse were mostly losers yesterday: industrials by 226.51 points or 2.34% to 9,440.03; holding firms by 122.31 points or 1.58% to 7,606.20; financials by 26.42 points or 1.44% to 1,804.45; property by 26.58 points or 0.64% to 4,090.05; and services by 3.07 points or 0.19% to 1,544.93.

The only counter that ended in the green was mining and oil, which added 80.55 points or 1% to 8,083.22.

Value turnover on Wednesday stood at P5.17 billion with 1.76 billion issues changing hands, lower than Tuesday’s P6.49-billion worth, with 2.19 billion issues.

Stocks that declined reached 126 yesterday, double the 60 stocks that advanced at the close of trading. Some 52 stocks closed the session unchanged.

Overseas investors remained sellers on Wednesday, but net foreign outflows were trimmed to P428.75 million from Tuesday’s P492.57 million. — Denise A. Valdez





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