PHILIPPINE SHARES continued their recovery on Wednesday as water stocks surged on the back of favorable developments in their issues with the government.
The 30-member Philippine Stock Exchange index (PSEi) gained 3.22 points or 0.04% to close at 7,733.67, while the broader all shares index climbed 4.93 points or 0.10% to 4,587.99.
“Market rebounded today as listed water concessionaires recover after water regulators [said they] will renegotiate the agreement to remove the onerous provisions. Extension will continue if both parties come into agreement,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Wednesday.
Papa Securities Corp. Sales Associate Gabriel Jose F. Perez shared the same sentiment.
“The market was once again fixated on the ‘water stocks’ MPI (Metro Pacific Investments Corp.), MWC (Manila Water Company, Inc.), and DMC (DMCI Holdings, Inc.), which surged today by 9.4%, 14.17%, and 9.61%, respectively on the recent news by the DoJ (Department of Justice) that they were not planning to replace the water concessionaires,” Mr. Perez said in an e-mail on Wednesday.
“We expect continued volatility for these names in the coming days especially since price movements have been heavily event-driven,” he added.
Earlier this month, President Rodrigo R. Duterte warned water concessionaires Manila Water and Maynilad Water Services, Inc. that he wills scrap their contracts since their concession deals disadvantaged the government. All those responsible for the deals, may it be former presidents, will be charged with economic sabotage, Mr. Duterte said.
On Monday, Justice Secretary Menardo I. Guevarra said the DoJ is not considering to replace the two companies as water providers, but is renegotiating their contracts. There is still no definite date as to when the companies and the government will meet to discuss the contracts, but this will likely happen early next month.
On Wall Street, Dow Jones Industrial gained 31.27 points or 0.11% to 28,267.16, the S&P 500 index gained 1.07 points or 0.03% to 3,192.52, while the Nasdaq Composite increased 9.13 points or 0.10% to 8,823.36.
Back home, sub-sectors mostly gained, except for the financials and mining and oil counters, which fell 19.74 points or 1.06% to 1,830.39 and 16.94 points or 0.22% to 7,511.02, respectively.
Those that gained were led by services, which added 6.34 points or 0.41% to 1,534.43; holding firms rose 28.89 points or 0.38% to end at 7,499.68; industrials gained 25.05 points or 0.26% to 9,608.39; and property increased 9.61 points or 0.23% to close 4,098.89.
Some 1.49 billion issues valued at P7.80 billion switched hands on Wednesday, down from previous session’s 2.71 billion issues valued at P10.37 billion.
Net foreign outflows for Wednesday’s session totalled P1.06 billion, up from previous session’s net sales worth at P536.04 million.
Stocks that gained narrowly beat those that fell, 93 to 91, while 59 issues were unchanged. — Vincent Mariel P. Galang