Philippine equities drifted lower in a consolidation phase after a record run over the last four months, with concern over the West Philippine/South China sea dispute putting lingering pressure on prices.
The Philippine Stock Exchange index (PSEi) shed 0.39 percent or 30.39 points to close at 7,834.88. The All Shares index lost 0.32 percent or 14.15 points to 4,480.02.
Alexander Adrian Tiu, analyst at AB Capital Securities Inc., said the El Nino weather phenomenon and geopolitical factors, as well as the decision on the Manila Water arbitration case contributed to the selling pressure.
“The market retreated due to various factors such as the light El Nino (impact on the economy) and geopolitical risks in the West Philippine Sea. It was also dragged down by the Manila Water [Company Inc.] arbitration, which pulled down conglomerates and the holding firms sector in general,” Tiu said in a text message.
Tiu was referring to a decision by the International Chamber of Commerce to uphold the position of regulator Metropolitan Waterworks and Sewerage System (MWSS) disallowing Manila Water to pass on its corporate income tax to customers.
“The market continued its selloff and we expect the market to continue doing so in the next few days,” said Bryan Gomez, co-head of investments at Citisecurites Inc.
“Right now, it seems that funds are seeing the Philippines as having made its run this year, and they can really start taking their profits and then shift to other markets in the region,” Gomez said. He added, these funds may be attracted to “the biggest free lunch” that is happening in Hong Kong.
Gomez sees the local market trading within the 7,800 to 7,900 range in the next few days, even “up to 8,000 points at best.”
Among the sectoral indices, holding firms posted a 1.24-percent loss, while the rest gained, led by mining and oil’s 0.52 percent rise.
Actively traded stocks ended mixed, with five decliners and five advancers. Top stocks that lost were BDO Unibank Inc., GT Capital Holdings Inc., Ayala Corp., Metropolitan Bank and Trust Company and DMCI Holdings Inc., while those that gained were Universal Robina Corp., Alliance Global Group Inc., Energy Development Corp., Ayala Land Inc. and SM Prime Holdings Inc.
Losers outnumbered gainers 92 to 77, while 52 issues finished unchanged. Trade volume was thin at 1.04 billion shares, valued at P7.2 billion.
On Monday, the main PSEi dropped 1.03 percent or 81.62 points to 7,865.27, while the broader All Shares index slipped 0.94 percent or 42.69 points to 4,494.17.