Worries over new virus pull PSEi below 7,500
The local stock barometer slid below 7,500 on Tuesday as investors continued to dump companies related to the Ayala group. The main-share Philippine Stock Exchange index (PSEi) fell by 85.95 points, or 1.14 percent, to close at 7,466.65, in line with sluggish regional markets.
The PSEi has now broken below its one-year support at 7,545-7,600. The next barriers are further down at 6,800 to 7,000.
Aside from regulatory jitters on the Ayala group, the country’s oldest business house, investors are worried over the breakout of a new strain of virus in China.
“Investors fear that this may have the same damaging economic effects as the Severe Acute Respiratory Syndrome (SARS) outbreak back in 2003. There is also some concern that we may see a potential contagion as millions of Chinese prepare to travel for the Lunar New Year Holiday,” said AAA Equities head of research Christopher Mangun.The day’s most actively traded company was Ayala Land, whose Technohub property deal with the University of the Philippines is now facing a lot of scrutiny. The beleaguered property firm shed 2.47 percent, while its parent conglomerate Ayala Corp. fell by 4.67 percent.
Ayala’s banking arm BPI also lost 4.23 percent.
“The general investor sentiment has turned fearful which is creating all this selling pressure. The PSEi’s failure to stay above 7,500 signals a much bigger move to the downside,” Mangun said.
Article continues after this advertisementAll counters ended in the red, led by the financial and holding firm sectors which lost over 1 percent.
Article continues after this advertisementAside from Ayala companies, Metro Pacific also lost 3.32 percent. Like Ayala-led Manila Water, the group’s water concessionaire Maynilad Water Services is also under scrutiny.
Megaworld lost 2.71 percent while Metrobank fell by 1.62 percent.
SM Investments, BDO, URC, AGI, ICTSI and Globe Telecom all fell by less than 1 percent.
On the other hand, GT Capital gained 1.28 percent while SM Prime firmed up by 0.63 percent.One notable gainer outside the PSEi was Cirtek Holdings, which rose by 6.86 percent.
Turnover for the day amounted to P7.76 billion. Domestic investors pared their holdings whole foreigners marked P422.5 million worth of net buying. INQ
