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Shares slump as Huawei CFO’s arrest causes jitters

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PSE bell
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STOCKS tumbled on Thursday as investors were concerned the arrest of a top executive of Chinese telco giant Huawei could further flare up trade tensions between China and the United States.

The bellwether Philippine Stock Exchange index (PSEi) plunged 1.25% or 95.58 points to close at 7,535.32, after trading in the red for the entire day. The broader all- shares index likewise fell 0.94% or 43.24 points to finish at 4,530.92.

“Philippine shares continued the lackluster performance, using the futures market as a proxy for regional sentiment,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.

Stock market futures in the US mostly went down on Wednesday, reacting to the arrest of Huawei Chief Financial Officer (CFO) Meng Wanzhou in Canada at the request of US authorities for allegedly violating US sanctions against Iran. This adds to the already rocky foundation of the supposed 90-day truce agreed upon by leaders of both countries during the G20 Summit.

The Dow Jones Industrial Average futures dropped 1.3% or 332 points, while the S&P 500 futures slipped 1.3% or 34.20 points.

US markets were closed on Wednesday in observance of a national day of mourning following the death of former President George H.W. Bush last Nov. 30.

Asian indices also followed US market futures, closing mostly in negative territory on Thursday.

The bloodbath extended to all sectors back home, led by the property sub-index which dropped 1.95% or 73.10 points to 3,672.33.

Holding firms shed 1.35% or 101.91 points to 7,443.35; services slipped 0.91% or 13.15 points to 1,424.27; mining and oil went down 0.59% or 51.41 points to 8,554.64; industrials dipped 0.59% or 64.73 points to 10,842.51; while financials lost 0.42% or 7.67 points to 1,790.40.

Some 4.61 billion issues switched hands resulting in a turnover of P7.19 billion, down from Wednesday’s P8.32 billion.

Decliners outpaced advancers, 113 to 74, while 50 names were unchanged.

Foreign investors turned buyers, recording net inflows of P128.34 million compared to the previous session’s net sales worth P28 million.

Among the day’s top gainers was First Gen Corp. (FGEN), which rallied 4.81% to P19.18 each.

“This is the second day straight that FGEN has bucked the trend and stayed the top gainer. Its partnership with Tokyo Gas in pursuit of building an LNG terminal appears to have been the catalyst as this should ensure its ability to maintain a stable fuel source upon Malampaya’s depletion,” Papa Securities Corp. Head of Online Trading Arbee B. Lu said in an e-mail.

“Despite today and yesterday’s declines, the PSEi is still trading well within its uptrend channel and has room to correct without breaking down until 7,381 — that’s still -2.0% away. We continue to view this as an opportunity to recalibrate holdings in preparation for the next upswing,” Ms. Lu said on Thursday. — Arra B. Francia