Selloff hits firms linked to water row

Investors yesterday dumped shares in companies with interest in beleaguered water concessionaires Manila Water Co. and Maynilad Water Services Inc., which both agreed to waive P10.8 billion in arbitral award and tariff adjustments and the possibility of losing their franchise after 2022.

Metro Pacific and DMCI, key investors in Maynilad, slid by more than 13 percent after the Metropolitan Waterworks and Sewerage System (MWSS) announced that it would not extend their water franchise beyond 2022.

Shares of Manila Water, on the other hand, tumbled 13.93 percent while its parent conglomerate Ayala Corp. lost 3.07 percent.

While some investors thought that Manila Water and Maynilad’s announcement on Wednesday to forego claims awarded by an arbitral tribunal would ease President Duterte’s tirade against them, MWSS’ announcement that the franchise deals would not be renewed sent shockwaves to investors.

The main-share Philippine Stock Exchange index (PSEi), on the other hand, managed to rise by 50.23 points or 0.65 percent to close at 7,786.41 as investors shifted their money to other large-cap stocks.

Elsewhere in the region, stock markets also mostly traded higher as investors awaited progress on US-China trade talks.

At the local market, the interest rate-sensitive property counter was the biggest gainer, rising by 1.43 percent, ahead of the Bangko Sentral ng Pilipinas’ monetary setting on Thursday.

Value turnover for the day amounted to P5.29 billion. About P471.74 million worth of foreign funds flowed out of local equities for the day. There were 98 advancers that edged out 86 decliners.