PSEi tumbles as ‘Brexit’ vote prevails

A man lays down on the green in Parliament Square as the sun rises behind the Houses of Parliament in London, Friday, June 24, 2016. Britain voted to leave the European Union after a bitterly divisive referendum campaign, according to tallies of official results Friday. AP

INVESTORS dumped stocks on Friday as risk aversion across regional markets was heightened by a looming “Brexit” or Great Britain’s exit from the European Union.

The Philippine Stock Exchange index shed 100.06 points or 1.29 percent to close at 7,629.72. All counters fell, led by the financial, holding firms, services and property counters which all tumbled by over 1 percent.

“Brexit (Britain’s exit) it is, after all. This is a surprise to markets. Online polls got it right, bookies and the markets got it wrong,” Citigroup said in a research note.

In line with prediction markets, Citi said financial markets had largely priced out the likelihood for Brexit, with emerging market currencies returning to levels where it was on June 8th, just before Brexit fears started to surge. “As such markets now have some re-pricing to do,” Citi said.

On June 23, the British people voted in a referendum to leave the EU, mostly due to concerns on immigration controls amid a wave of refugees from war-torn areas in the Middle East.

Although Brexit is generally seen to have a modest impact on the Philippine economy, financial markets succumbed to global market volatility.

At the local market, total value turnover for the day amounted to P9.56 billion. There were nearly four decliners for every single gainer.

Investors sold down shares of Megaworld and Semirara, which both fell by over 3 percent while MPI, FGEN, GTCAP, SMIC and BDO all declined by over 2 percent.

ALI, the day’s most actively traded stock, fell by 1.93 percent while Metrobank and JG Summit both fell by over 1 percent. URC, Globe and ICTSI also declined.

Among those that bucked the day’s downturn were Jollibee and AC which respectively firmed up by 1.21 percent and 0.35 percent.

Outside of the PSEi, Philex rebounded by 8.42 percent after the freefall in previous days.

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