PSEi weighed down by mining jitters

The local stock barometer slipped by 1.2 percent on Tuesday as jitters over US politics and a local mining shakeout curbed risk-taking among investors.

The Philippine Stock Exchange index lost 87.83 points to close at 7,206.84 on Valentine’s day, tracking mostly sluggish regional markets following the resignation of US president Donald Trump’s national security adviser Michael Flynn and ahead of a testimony by the US Federal Reserve chief before the US Congress.

“The rally yesterday (Monday) was obviously not forever. Investors fell out of love for the market in today’s trading. Developments in the US continues to rattle market sentiment not only locally but globally,” said Astro del Castillo, managing director at fund management firm First Grade Finance.

“News in our mining industry contributed to the heartache of investors. Expect the market to continue trading sideways as investors await for new developments to inspire buying,” he said.

On Tuesday, it was reported that the Department of Environment of Natural Resources (DENR) had officially served notice of cancellation of mineral production sharing agreements (MPSAs) to mining firms, some of which are owned by listed companies.

The mining/oil index thus fell by 2.67 percent while all other counters also tumbled.

“Philippine shares fell along with the rest of Asia as investors took their cue from earnings regionally, and awaited more announcements from full-year 2016 results. In additional, the mining sector was the biggest loser because of the recent announcement from the DENR to cancel mineral sharing agreements,” said Luis Gerardo Limlingan, managing director at Regina Capital Development.

Furthermore, Limlingan noted that China’s inflation had come in at 2.5 percent year-on-year in January, above market expectations and accelerating from December. “This drove speculation as how and when the Monetary Board would tighten policy,” Limlingan said.

He added that market players were mostly cautious ahead of Federal Reserve Chair Janet Yellen’s appearance before the Senate Banking Committee to deliver the Fed’s semi-annual Monetary Policy Report to Congress and answer questions from lawmakers.

Total value turnover at the market amounted to P7.3 billion. There were 95 advancers which were outnumbered by 100 decliners while 44 stocks were unchanged. Foreign investors were net sellers to the tune of P591 million.

Investors dumped shares of URC, which fell by 3.4 percent, as well as SM Investments, PLDT, SM Prime and ICTSI which all dropped by over 2 percent. Ayala Land, BDO, Ayala Corp. and GTCAP all slipped by over 1 percent while Jollibee and Security Bank also contributed to the decline.

Outside the PSEi, key decliners included Arthaland (-5.6 percent) and Cemex (-3 percent). Investors have pocketed gains from Arthaland while Cemex was battered by its weak fourth quarter results. Shares of Philex Mining fell by 12.75 percent after it was announced that permit for its $2-billion Silangan mine will be among those cancelled at the pre-production stage.

On the other hand, LTG defied the day’s downturn, gaining 5.34 percent as the Duterte administration appeared more aggressive in running after illicit trading of cigarettes.

Semirara, Metrobank, Globe and BPI also slightly gained.

Non-PSEi stock STI surged by 9.91 percent. The private school chain operator reported record-high revenues in the first nine months of its fiscal year.