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Friday, March 29, 2024

Market tumbles; Ayala declines

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The stock market slumped Wednesday on another bout of profit taking, with Ayala Corp. leading the losers after Japan’s Mitsubishi Corp. trimmed its stake in the local conglomerate at a discount.

The Philippine Stock Exchange Index tumbled 148.72 points, or 1.9 percent, to 7,864.70 on a value turnover of P20.1 billion. Losers overwhelmed gainers, 127 to 64, with 50 issues unchanged.

Ayala Corp. fell 5.3 percent to P919 after Mitsubishi unloaded 13 million common shares of Ayala at P900 each, a 7.3 percent discount to Tuesday’s closing price of P970.50 apiece.

Mitsubishi Corp. raised P11.7 billion ($225 million) from the sale of its stake in Ayala as part of the group’s portfolio management and rebalancing of assets. The transaction, conducted through a series of block sales in the local exchange,  triggered a selldown in shares of Ayala. Ayala property unit Ayala Land Inc. lost 4.2 percent to P43.10.

SM Prime Holdings Inc. of retail tycoon Henry Sy Sr. dropped 6.9 percent to P37, while International Container Terminal Services Inc., the biggest port operator, declined 2.4 percent to P104.80.

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The pound, meanwhile, edged down Wednesday after the record defeat of British Prime Minister Theresa May’s Brexit plan but mostly held its ground as investors consider the next likely developments in the long-running saga.

Asian equity markets mostly rose after Tuesday’s rally that was fueled by Chinese plans to cut taxes in a bid to support the stuttering economy.

However, traders are growing increasingly worried about the lack of movement in the US over the government shutdown, which is now in its fourth week, with both sides digging their heels in.

Tokyo ended off 0.6 percent, but Hong Kong rose 0.2 percent to build on Tuesday’s two percent rally while Shanghai was flat.

Sydney and Seoul each rose 0.4 percent, while Singapore added 0.3 percent and Wellington put on 0.7 percent with Mumbai 0.2 percent higher.

The sterling tanked to a near two-year low soon after the government’s proposal on leaving the European Union was soundly beaten Tuesday evening, but it soon bounced back as traders bet there would not be a “no-deal” exit.

And while it was slightly lower in Asia, the pound managed to avoid the sort of pummeling many had predicted, and analysts say the positive news is that the options for the future are narrowing.

With May expected to win a vote of no confidence called by the opposition Labour Party on Wednesday, talk will move to what happens next.

Analysts say May could ask to delay Britain’s March 29 exit from the bloc as she looks for a more palatable agreement from her EU peers, while there is growing speculation of a general election and even another referendum.

“Momentum is shifting away from the harder Brexit route and towards a number of options ranging from postponement and second referendum. That is pound supportive,” said Gavin Friend at National Australia Bank.

But he added: “I don’t see the pound rallying much until markets are sure the (ruling) Conservatives have seen off the confidence motion.”

Meanwhile, London may still leave the bloc without a backup. With AFP

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