Stocks fall as banks take hit from Hanjin default

By Arra B. Francia, Reporter
SHARES fell on the last trading day of the week as investors turned cautious on the banking sector after news of Korean firm Hanjin’s $412-million loan default from five of the country’s largest banks.
The 30-company Philippine Stock Exchange index (PSEi) fell 1.01% or 81.14 points to close at 7,904.09 on Friday. The broader all shares-index also slumped 0.72% or 34.76 points to end the week at 4,730.15.
“The index dropped 81.14 points today to close at 7,904.09, but even fell by as much as 129 points intraday, dragged down by the Hanjin debt issue which plagued the banking sector,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an email on Friday.
Upon Hanjin Heavy Industries and Construction Philippines’s declaration of bankruptcy earlier this week, Rizal Commercial Banking Corp. (RCBC), Land Bank of the Philippines (LANDBANK), Metropolitan Bank & Trust Co. (Metrobank), Bank of the Philippine Islands (BPI), and BDO Unibank, Inc. were reported to have a $412-million dollar loan exposure to the firm.
RCBC, which was found to have the largest loan exposure at $140 million, saw its shares drop by 9.12% to P26.40 apiece.
Metrobank was the biggest loser in the list of 20 most actively traded shares for the day, losing 4.82% to P77.95 each. BPI followed with a drop of 4.76% to P90 apiece. Mr. Perez noted that the stocks posted the top net foreign outflows for the day at P406 million and P100 million, respectively. Meanwhile, shares in BDO were unchanged at P131.30 each.
Regina Capital Development Corp. Managing Director Luis A. Limlingan also attributed the market’s decline to the Hanjin issue, noting that this preventing the PSEi from rising past the 8,000 level.
“Philippine investors took money out as the index neared the 8,000 level. Some obvious headwinds preventing us from cracking well past 8,000 — financials getting hit as five of the largest PH banks are firefighting the biggest corporate default in the country’s history,” Mr. Limlingan said in a mobile message.
The industrials counter was the lone advancer on Friday, gaining 0.1% or 11.73 points to 11,486.68. The rest declined, led by financials which plunged 2.53% or 46.1 points to 1,772.32. Property dropped 1.15% or 46.12 points to 3,944.12; holding firms shed 0.59% or 47.04 points to 7,883.57; mining and oil slipped 0.53% or 47.14 points to 8,742.18; and services went down 0.18% or 2.92 points to 1,542.15.
Foreign investors maintained their net buying position, although at a much lower figure of P228.9 million compared to Thursday’s P1.5 billion.
Some 5.49 billion issues switched hands, resulting in a turnover of P8.5 billion, lower than the previous session’s P10.11 billion.
Decliners outpaced advancers, 125 to 79, while 37 names were unchanged.