Market down as investors dump Jollibee stocks
Investors dumped shares of fast-food giant Jollibee Foods Corp., dragging down the main stock barometer on Tuesday (May 26), in anticipation of poor earnings due to the novel coronavirus disease (COVID-19) pandemic.
Bucking mostly upbeat regional markets, the main-share Philippine Stock Exchange index (PSEi) shed 42.36 points or 0.77 percent to close at 5,496.83 as foreign selling intensified.
Stocks of Jollibee, the day’s most actively traded, slid by 10.53 percent to close at P119 a share.
Veteran stockbroker Joseph Roxas, president of Eagle Equities Inc., said the market was pricing in “very ugly” earnings this year as anticipated by the company itself.
“It has returned to a downtrend after the pullback to the P140 (per share) area,” Roxas said. “They have to spend P7 billion to restructure.”
Jollibee had disclosed that the P7-billion expense provision for its global restructuring–which assumes that the world would not quickly revert to the pre-COVID-19 pandemic period–would be set up in the second quarter of 2020 and would be incurred mostly within the year.
As Asia’s most valuable restaurant chain braces for poor earnings performance this 2020, it intends to streamline non-performing stores and reinforce delivery, take-out and drive-through services across its businesses around the world, most importantly in its largest markets–the Philippines, China and North America.
Papa Securities noted that Jollibee’s technical readings had shown a bearish crossover, with the next support level at P114.50.
Investors are awaiting the reopening of Metro Manila to business after a two-month lockdown.
The first-quarter earnings results reported so far offered a glimpse of the severe beating that corporate Philippines will have to endure this year, especially those in the discretionary consumer segments.
“Local catalysts are still eyed further into the week with the MSCi rebalancing effectivity on May 29, Friday, and likewise the fate of NCR (National Capital Region) come June — albeit with most Metro Manila mayors already favoring a shift to GCQ (general community quarantine) by then,” Papa Securities said.
Other battered shares included those of lenders Security Bank and BDO, which fell by 6.83 percent and 4.13 percent, respectively.
Property giant Ayala Land lost 3.24 percent, while Metrobank and Metro Pacific both declined by more than 2 percent.
Conglomerate Ayala Corp., Universal Robina Corp. and Robinsons Land all declined by over 1 percent.
Meralco shares also slipped by 0.72 percent.
One notable decliner outside the PSEi was Dito, which lost 1.81 percent.
On the other hand, SM Investments, BPI and SM Prime all gained more than 1 percent, while Puregold, Globe Telecom, PLDT and GT Capital slightly rose.
Preferred shares of San Miguel Corp. were up by 1.38 percent.
Value turnover for the day amounted to P5.17 billion. There was heavy net foreign outflow of P1.18 billion.
There were 156 decliners that overwhelmed 37 advancers, while 35 companies were unchanged.
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