Stocks retreated on Monday, reflecting market reaction to the accident at a Semirara Mining site on Friday and the controversy that continued to shroud the Torre de Manila project of another Consunji-led firm, DMCI Holdings Inc.
The Philippine Stock Exchange index (PSEi) dropped 1 percent or 75.96 points to close at 7,541.17, while the wider All Shares index fell 0.85 percent or 36.78 points to 4,308.78.
Joylin Telagen, research analyst at IB Gimenez Securities Inc., said the market was weighed down by investors opting to cash in on a previous run.
The market was badly hit by the two Consunji-led firms DMCI and Semirara Mining and Power Corp., which plummeted 7.70 percent and 13.64 percent, respectively.
“Profit-taking and basically, the Semirara mining accident in Antique,” Telagen replied when asked what pulled the market down. “Investors of DMCI and Semirara sold off today… investors opted to take profits.”
“Based on technicals, the market is already near the resistance level and we’ve [been]up six consecutive days so it’s no shock that investors took profits,” she added.
The Department of Energy has suspended the operations of Semirara in Caluya, Antique, after its open pit coal mine collapsed on Friday morning, killing nine workers. The DoE has also launched an investigation to determine the cause of the accident or whether it was triggered by neglect.
According to a Semirara disclosure, the energy department has arrived at the mine site for the probe. As of July 19, Sunday, six out of the nine bodies have been recovered, and the search and retrieval operations continue.
The research analyst said that in the next few days, local equities are seen trading in narrow ranges as the market consolidates between 7,400 and 7,600 points, with most market participants likely to wait for first-half corporate earnings results and gross domestic product data.
Telagen added that the positive turn in the US economy is likely to push an interest hike by the Federal Reserve sooner, either by September or October.
“It’s possible that the US rate hike will come sooner. It’s dependent on [what happens next in]Greece and China, and since it [seems]positive, we will most likely see an earlier hike in US rates. I think September to October,” she said.
Failing that, it will probably create a “bubble” situation. “But we can still reach 8,000 by year-end as long as corporate earnings and GDP numbers are strong,” she added.
In Monday’s trade, value turnover stood at P12.75 billion on 1.28 billion shares that changed hands.
Decliners outnumbered advancers, 92 to 68, while 52 issues finished unchanged.