Jollibee shares dip, IMF outlook drag PSEi down
Credit to Author: ANGELICA BALLESTEROS, TMT| Date: Wed, 24 Jul 2019 16:15:53 +0000
THE stock market slid out of the bull territory on Wednesday after Jollibee Foods Corp.’s (JFC) stock price plunged and growth forecasts for the world economy were trimmed.
The benchmark Philippine Stock Exchange index (PSEi) declined by 1.09 percent or 89.97 points to close at 8,161.49, marking a 19.25-percent increase from the index’s lowest level of 6,843.83 in November 2018.
The wider All Shares decreased by 0.70 percent or 34.71 points to finish at 4,956.24.
AAA Southeast Equities Inc. President Matthew Cabangon said Jollibee’s shares, which fell by 8 percent or P22 points to close at P251 each, contributed to the index’s decline.
“This is the largest one-day drop in JFC since November 2016. It contributed to -21 points in [Wednesday’s] PSEi move,” he added.
On Wednesday, Jollibee announced it would buy United States-based coffee chain The Coffee Bean & Tea Leaf for $350 million (P18 billion) through its Singapore-based subsidiary.
Cabangon said the purchase was “a mixed bag” and “dilutive acquisition” for the fastfood giant, given that Coffee Bean was operating at a loss for two years now, which would hurt Jollibee’s earnings per share.
Regina Capital Development Corp. head of sales Luis Limlingan agreed, saying would be a challenge for Jollibee to make Coffee Bean profitable, as it was still rationalizing its latest investment in US-based fastfood chain Smashburger.
Overseas, Limlingan said trading was also dented by the International Monetary Fund’s downgrade of its growth outlook for the global economy, saying missteps on trade and Brexit could derail a projected rebound.
The local market traded in contrast to its US counterpart, with the three main indices all ending in the green.
Regional markets went mixed, as Tokyo rose 0.41 percent, Shanghai grew 0.80 percent, and Hong Kong inched up 0.20 percent.
Seoul declined 0.91 percent, Jakarta dipped 0.15 percent, Singapore slipped 0.23 percent, and Bangkok was down by 0.12 percent.
In Manila, only the services index finished firmer, up 0.31 percent.
More than 2.89 billion issues were traded, valued at P6.43 billion.
Losers led winners, 125 to 73, while 57 issues were unchanged.
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