The local stock barometer pulled back for the second straight session on Wednesday as investors priced in the recent stream of third quarter corporate earnings and a recent moratorium on new coal-fired power plant projects.
The main-share Philippine Stock Exchange index (PSEi) lost 37.29 points, or 0.58 percent, to close at 6,377.79. Signs of weakness in the property space and a government order to stop new coal-fired power plant projects also caused some knee-jerk reaction.
Meanwhile, newly listed Converge ICT firmed up after a two-day bloodbath. Its shares rose by 4.17 percent to close at P14.50 per share. However, it is still trading below its initial public offering price of P16.80 per share.
“The PSEi continued lower as selling pressure picked up. More investors are now securing profits from the recent rally, which is giving investors who have not been able to ride the rally, a chance to pick up shares at lower prices. As more third quarter earnings reports come in, investors are realizing that the numbers are not as bad as what was expected. With more mobility and business restrictions lifted by the day, economic activity will continue to pick up,” said Christopher Mangun, head of research at stock brokerage AAA Equities.
On Converge, which has been the most actively traded company since its debut on Monday, Mangun said “weak hands have exited and the price may begin to recover.”
The PSEi was dragged down largely by the property counter, which fell by 2.04 percent. The property sector has been hit hard by the pandemic and the regulatory constraints on online gaming firms.
The financial, holding firm and mining/oil counters also slipped.
The industrial and services counters both added less than 1 percent.
Value turnover for the day hit P6.8 billion. There were 112 advancers versus 89 decliners, while 46 stocks were unchanged.
AEV and SM Prime both fell by nearly 3 percent. SM Investments, Puregold, ICTSI and PLDT all slipped by less than 1 percent.
One notable decliner outside the PSEi was Semirara, which fell by 7.89 percent due to the Department of Energy’s (DOE) announcement of a moratorium on new coal-fired power plants.
COL Financial said while the moratorium would have no immediate impact on its coal business, it could “somewhat diminish the long-term growth outlook for domestic coal demand,” noting that domestic coal sales accounted for 50 percent of Semirara’s total coal sales volume.
Lopez-led First Gen rose by 10.98 percent as the company—which has focused on renewable energy for years—was seen to benefit from the moratorium.
As the DOE’s moratorium pertains only to new coal plants, COL said it would have no impact on power companies with existing coal plants, or those that were expanding coal power generation capacity. —Doris Dumlao-Abadilla