PSEi down on first trading day of 2020
Credit to Author: Tyrone Jasper C. Piad| Date: Thu, 02 Jan 2020 16:14:14 +0000
The stock exchange started off the year in the red territory as investor sentiment continued to be dampened by President Rodrigo Duterte’s dispute with water firms and a media company over franchise agreements.
left: Roberto Jose Jimenez, PSE assistant vice president and head of Controllership and Treasury; Ali Yu,
PSE director; Renee Rubio, Securities Clearing Corp. of the Philippines chairman; Omita Tiangco, PSE
treasurer; Roel Refran, PSE chief operating officer; Ramon Monzon, PSE president and chief executive
officer; Jose Pardo, PSE chairman; Daisy Arce, Capital Markets Integrity Corp. president; and PSE directors
Eddie Gobing and Wilson Sy. PHOTO BY GERARD SEGUIA
The benchmark Philippine Stock Exchange index (PSEi) dropped by 0.93 percent or 72.73 points to close at 7,742.53 while the wider All Shares fell 0.66 percent or 30.92 points to end at 4,618.75.
“Sentiments seem to have been hit hard by the President’s unceasing tirades against the water concessionaires and broadcaster ABS-CBN Corp. [PSE code: ABS], even ahead of a scheduled message on the issues on January 6,” Philstocks Financial Inc. research head Justino Calaycay said.
Following the water shortage in March, President Duterte ordered the review of Manila Water Co. Inc. and Maynilad Water Services Inc.’s agreements, coming up with a conclusion that some of the terms were “onerous.”
The Metropolitan Waterworks and Sewerage System (MWSS) also revoked a board resolution extending the water concessionaires’ contracts — 2022 to 2037 — following President Duterte’s directive. But the regulator maintained that the 25-year deal ending 2022 were “valid and subsisting contracts.”
Meanwhile, President Duterte earlier threatened ABS-CBN of non-renewal of its franchise from allegations the network did not air his campaign ads in 2016 despite rendering payment.
ABS-CBN’s franchise is set to end by March this year; and an approval from Congress and the President is needed to facilitate extension.
“Losses to welcome a new trading calendar isn’t all uncommon — albeit occurring only three times in the last decade, namely 2010, 2014 and in 2016,” he said.
“Nevertheless, the first two days of the trading calendar may not be an accurate barometer of investor sentiment going forward. The real picture should emerge next week,” he added.
Meanwhile, Regina Capital Development Corp. head of sales Luis Limlingan said that investors shifted focus to Beijing after the People’s Bank of China cut the required reserve ratio by 50 points.
The reduction, to take effect on Jaunuary 6, will allow the release of $114.91 billion of long-term liquidity to the banking sector.
In contrast, Wall Street was up. Dow Jones, S&P 500 and Nasdaq climbed by 0.27 percent, 0.29 percent and 0.30 percent, respectively.
In Asia, Shanghai surged 1.15 percent, Hong Kong spiked 1.21 percent, Singapore climbed 0.72 percent, Thailand grew 0.95 percent, and Vietnam added 0.47 percent.
Tokyo declined 0.76 percent, Seoul slipped 1.02 percent, and Jakarta slid 0.36 percent.
In Manila, all sectors ended in the red except for services that gained 0.21 percent.
Volume turnover stood at 945.64 million shares amounting to P4.48 billion.
Losers led winners, 111-60, while 66 issues were unchanged.