Philippine stocks fall as investors assess impact of floods

Photo taken from pse.com.ph

MANILA, Philippines—Most local stocks fell sharply on Thursday, bucking the upswing across the region, as the market weighed the impact of the recent Ondoy-like flooding across Metro Manila and parts of Luzon.

The main-share Philippine Stock Exchange index fell by 52.06 points, or 0.98 percent, to close at 5,256.61. All counters ended in the red weighed down most by mining/oil (-3.02 percent) and property (-2.57 percent) while the financial and services counters both rose by over 1 percent.

There were 44 advancers, which were overwhelmed by 122 decliners, while 38 stocks were unchanged. Value turnover amounted to P5.22 billion. Dealers said the market was starting to digest the impact of the recent floods.

In terms of specific stocks, the market was weighed down most by AC (-1.7 percent), ALI (-5 percent), PLDT (-1.09 percent), Metrobank (-1.27 percent), Philex (-3.25 percent) and Globe (-1.5 percent).

The index losses were tempered by the modest gains of AP, DMCI and RLC. ABSCBN-PDRs were up by 3 percent.

SB Equities said in its early morning research note that the market would be looking at which companies have benefited from, as well as those that have been affected by the floods that struck a large portion of the island of Luzon due to a prolonged torrential rain.

Among the companies that are seen to benefit are telecommunications firms, namely PLDT and Globe Telecom, from increase in call volume and SMS due to higher demand for telecommunications services. It said the clean-up of flooded areas in Metro Manila should also mean higher sales volume for water concessionaires—Manila Water and Maynilad—which in turn could be accessed through MPIC and DMCI Holdings.

SB Equities said relief operations among the flood victims should also mean higher noodle and bottled water sales, which should benefit URC.

“While there are companies that would benefit from this event, there are some that would be affected as well. JFC sales are expected to be affected as some of its branches were flooded. Same is true with SM Prime Holdings as five of its malls are also located in flooded areas. A decline in sales volume is also seen for Meralco as electricity in some of the flooded concession areas had to be cut off to lessen the risk of electrocution,” the brokerage said.