Duterte arrest, fears of ‘political instability’ wipe out PSEi gains

FILE PHOTO: PSE Center INQUIRER FILES

MANILA, Philippines – Investors spooked by possible “political instability” following the arrest of former President Rodrigo Duterte sent the local bourse’s main index tumbling down by 2 percent on Tuesday, erasing its recent gains.

The benchmark Philippine Stock Exchange Index (PSEi) suffered from a sell-off and fell by 2.42 percent, or 154.22 points, to close at 6,206.55.

Likewise, the broader All Shares Index shed 1.72 percent, or 64.33 points, to 3,684.59.

READ: PSEi extends rally, climbs back to 6,300

A total of 753.65 million shares worth P7.71 billion changed hands, stock exchange data showed. Foreigners also opted to exit the Philippine market, with foreign outflows totaling P350.28 million.

The bourse’s decline came after reports of Duterte’s arrest, with the PSEi dropping to as low as 6,156.97 within the day.

This also represents the index’s steepest drop since it fell into bear territory last January, during which it plunged by more than 4 percent.

“The timing of the market’s drop implies that investors are wary of political instability following the arrest of former President Duterte,” Alfred Benjamin Garcia, research head at AP Securities Inc., told the Inquirer in a text message.

Unicapital Securities Inc. head of research Wendy Estacio-Cruz said there was “heightened anxiety over both external and domestic factors, with political uncertainty amplifying the impact of global market movements.”

“We see increased volatility in the market, especially if uncertainties surrounding the political situation persist,” Cruz said.

Garcia added that the PSEi’s drop was further aggravated by recession worries in the United States as the trade war escalated.

All subsectors bled, with property firms seeing the worst fall as index heavyweights Ayala Land Inc. (ALI) and SM Prime Holdings Inc. both dropped.

ALI was the top-traded stock as it plunged by 6.17 percent to P22.05 per share, followed by International Container Terminal Services Inc., down 5.38 percent to P369; Bank of the Philippine Islands—one of the rare gainers—up 0.68 percent to P132.80; BDO Unibank Inc., down 2.03 percent to P154.80; and Jollibee Foods Corp., flat at P264 each.

Also among the busiest were Manila Electric Co., down 3.39 percent to P485; DigiPlus Interactive Corp., down 2.93 percent to P36.40; Universal Robina Corp., down 4.33 percent to P71.75; SM Prime, down 6 percent to P23.50; and JG Summit Holdings Inc., down 1.31 percent to P18.08 per share.