Stock market declines; EDC jumps

The stock market retreated Thursday in mixed trading after a disappointing GDP performance in the second quarter and ahead of the Monetary Board meeting later in the day.

The Philippines Stock Exchange Index fell 30.75 points, or 0.4 percent, to 7,820.71  on a value turnover of P6.3 billion. Losers beat gainers, 121 to 90, with 34 issues unchanged.

The gross domestic product grew slower in the second quarter and fell well short of expectations as a result of policy decisions that included the shutdown of holiday island Boracay, officials said Thursday. 

The six percent expansion in April-June was the weakest in three years and ended a run of 10 consecutive quarters in which the economy grew at least 6.5 percent.

Jollibee Foods Corp., the biggest fast-food chain, dropped 2.8 percent to P269, while Globe Telecom Inc., the second-largest telecommunications firm, lost 2.4 percent to P1,975.

Energy Development Corp., the biggest steam producer, jumped 41.4 percent to P7 after announcing a plan to voluntarily delist its common shares from the exchange after a scheduled tender offer.

EDC’s tender offer price of P7.25 apiece represents a 46-percent premium over the closing share price of P4.95 on August 7 and a 4-percent premium over the three-month volume weighted average price of P5.18.

Casino operator Bloomberry Resorts Corp. rallied 5.2 percent to P10.62.

Asian investors on Thursday, meanwhile, largely brushed off China’s tit-for-tat response to Donald Trump’s latest tariff threats, with most markets rising, but concerns about the impact of an all-out trade war are keeping optimism in check.

Beijing said on Wednesday it would impose 25-percent tariffs on $16 billion of US goods from August 23, retaliating in kind to a warning from US officials the day before and escalating a crisis that pits the world’s top two economies against each other.

While the row has sent global markets into convulsions this year, the latest development had been widely expected, with Wall Street ending mixed.

Hong Kong jumped 1.1 percent, extending a rally into a fourth day, while Shanghai surged 1.8 percent following healthy Chinese inflation data.

Seoul was 0.1 percent higher, Sydney added 0.5 percent and Wellington rose 0.8 percent, while Bangkok gained 0.1 percent.

However, Tokyo dropped 0.2 percent on a stronger yen.

Energy firms fell in line with a sharp sell-off in oil, which followed a report showing US stockpiles fell less that expected, while investors are also fretting over the effects of a China-US trade war on demand.

Both main contracts plunged more than three percent on Wednesday, with analysts saying figures pointing to a drop in Chinese imports from the US were also detrimental. WTI and Brent were slightly higher Thursday.

“Oil fell out of bed last night as worries over Chinese demand surfaced after the trade data yesterday and in the wake of China’s hitting back in the tariff war targeting energy products,” said Greg McKenna, chief markets strategist at AxiTrader. With AFP

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange ,
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