PSEi falls by 2.6% on Trump poll victory

The local stock market tumbled sharply on Wednesday, tracking a global financial market bloodbath, as investors braced for Donald Trump presidency in America.

The Philippine Stock Exchange shed 188.76 points or 2.58 percent to close at 7,119.04 as Trump’s poll victory shocked global markets.

“The market lost 2.5 percent in line with the region as Donald Trump’s apparent election victory was met with concern by investors. The main worry seems to be his ‘America first’ rhetoric, which is viewed by many as anti-trade,” said Manny Lisbona, president of PNB Securities.

Lisbona said the silver lining, however, was that the odds of a US Federal Reserve rate hike in December had declined to 50 percent from 82 percent, based on some news reports.

“Local markets sold off furiously as Republican candidate seems destined for an upset victory as of 3:30 pm. The PSEi took its cues from performances of the Asian bourses as well as the futures market, wherein the Dow (futures) slid as much as 860 points during Manila trading,” said Luis Gerardo Limlingan, managing director at Regina Capital Development.

“Trump has promised a big change in the corporate sector and huge capital spending via infrastructure, leading to hiring and wage pressure. Massive tax cut is also promised. Foreign policy skill, which is clearly lacking will be a test to the new administration. We can expect immediate flight to safety with Gold and US Treasuries been bid up,” Limlingan said.

The PSEi was led lower by the property counter, which fell by 3.47 percent while the industrial and holding firms counter slipped by over 2 percent. The services and financial counters fell by over 1 percent.

Value turnover amounted to P8.6 billion. There were over three times as much as losers (154) as advancers (43). There was P213 million in net foreign selling for the day.

Only the mining/oil counter rose, albeit by a marginal pace of 0.15 percent, as gold mining firms like Lepanto and Philex advanced.

Gold is deemed as a good hedge against global economic uncertainties.

Investors dumped shares of URC (-6.76 percent) and ICTSI (-5.26 percent), two of the Philippine companies with sizable overseas businesses.

ALI, AC and Megaword all fell by over 4 percent while Metrobank, GTCAP and Jollibee all slid by over 3 percent.

SM Prime, SMIC and MPI all slid by over 2 percent while BDO and JG Summit declined by over 1 percent.

One rare stock that benefited from news of Trump’s poll victory was Century Properties Group, which surged by 20 percent. The company has a branding deal with Trump for a $150-million upscale residential project. Ahead of the US elections, Pres. Duterte has named company chair and founder Jose Antonio special envoy to the US.