Ayala shares drag PSEi to red
Credit to Author: Tyrone Jasper C. Piad| Date: Mon, 20 Jan 2020 16:19:43 +0000
The continuous government crackdown on so-called oligarchs — with Ayala’s Technohub project as the recent case for probe — fueled selling pressure on Monday, sending the local exchange down to the 7,500 level.
The benchmark Philippine Stock Exchange index (PSEi) plunged 2.20 percent or 169.98 points to close at 7,552.60 while the wider All Shares fell 1.69 percent or 76.92 points to end at 4,474.27.
“Heightened regulatory risks amid plans to review the University of the Philippines-Ayala Technohub project pulled down the index heavyweights Ayala Corp. and Ayala Land Inc.,” Philstocks Financial Inc. said in a market comment.
Ayala Corp. and Ayala Land dropped by 6.60 percent and 7.003 percent, respectively, on Monday.
Over the weekend, Palace spokesman Salvador Panelo said in a radio interview that the Technohub project could be subject to investigation for allegedly paying rent as low as P20 per square meter only in the last 25 years.
This was not the first time Ayala was subject to such scenario. President Rodrigo Duterte earlier ordered the cancellation of Ayala-led Manila Water Co. Inc.’s contract extension after finding “onerous” provisions in its franchise agreement. A new contract is now subject to discussion.
“Any optimism that investors had vanished today as fears of the government’s crusade against oligarchs send prices much lower,” AAA Equities head of research Christopher Mangun said.
In contrast, Wall Street was up. Dow Jones, S&P 500 and Nasdaq rose by 0.17 percent, 0.39 percent and 0.34 percent, respectively.
Asian markets were mixed. Tokyo inched up 0.18 percent, Shanghai added 0.66 percent, and Seoul added 0.54 percent. Meanwhile, Hong Kong dropped 0.90 percent, Jakarta slipped 0.66 percent, Singapore fell 0.08 percent, Thailand tumbled by 0.57 percent, and Vietnam declined 0.03 percent.
In Manila, all sectors ended in bloodbath, with property and holding firms taking the biggest hit at 3.88 percent and 2.20 percent, respectively.
Volume was thinner at 913.66 million shares amounting to P6.27 billion.
Losers surpassed winners, 130-64, while 44 issues were unchanged.