PH shares down for 3rd straight session
The stock market was in the doldrums for the third session in a row on Wednesday as foreign funds continued to flow out of the market.
The main-share Philippine Stock Exchange index (PSEi) shed 6.39 points, or 0.09 percent, to close at 7,462.31 as investors awaited fresh catalysts.
Trading volume remained thin as investors weighed local regulatory risks as well as the impact of the spread of the novel coronavirus and the recent eruption of Taal Volcano.
“Lower tourist arrivals as a result of the virus scare will likely slow a steady and burgeoning source of foreign exchange although some tourists utilize payment apps and other forms of electronic payments to transact in the Philippines. Nonetheless, we may have to expect a smaller inflow of these travel exports in 2020 with yet another reason for depreciation for the peso. Meanwhile, the more likely and direct impact on the economy will be on the consumption front as global travel is expected to slow altogether,” ING Philippines economist Nicholas Mapa said in a research note.
Although risks to the inflation outlook are increasing, the potential slowdown of the global economy and overall domestic growth may put downward pressure on energy prices and inflation as a whole, Mapa said. “Despite potential inflationary pressures from temporary price shocks due to severe weather and the volcanic eruption, a global slowdown coupled with weaker growth on shore could mean that demand side pressures will be subdued.
In the face of this impending disruption to the world economic recovery, what the Philippine economy may need is a shot in arm and not an additional unnecessary handicap,” Mapa said.The mining/oil counter was the most battered, losing 2.8 percent.
The financial, industrial and holding firm counters all slipped, while the services and property counters slightly gained.Value turnover was thin at P4.95 billion.
There were 118 decliners that overwhelmed 69 advancers, while 42 stocks were unchanged.
The PSEi was weighed down most by Meralco, which lost 2.48 percent, while Security Bank, Ayala Corp., Universal Robina Corp. and Metro Pacific all lost over 1 percent.
SM Investments, Metrobank and Megaworld all shed less than 1 percent.
One notable decliner outside the PSEi was San Miguel Corp.’s controlling stockholder Top Frontier, which fell by 6.53 percent.
Cebu Air lost 3.98 percent as investors priced in the impact of the novel coronavirus on the travel and tourism industry.
On the other hand, JG Summit, Ayala Land and Bloomberry all gained over 1 percent.
SM Prime, BDO, PLDT and ICTSI also firmed up.
Beleaguered Manila Water gained 3.88 percent on hopes that the government will come up with an acceptable new water contract. —Doris Dumlao-Abadilla
