The stock market slumped Monday, pulled down by blue-chip stocks and on prospects the two private concessionaires of regulator Metropolitan Waterworks and Sewerage System will face bankruptcy if the government pursues the cancellation of the extension of their concession agreements.
The Philippine Stock Exchange Index tumbled 176.03 points, or 2.2 percent, to 7,701.60 on a value turnover of P6.2 billion. Losers overwhelmed gainers, 126 to 70, with 73 issues unchanged.
Maynilad Water Services Inc. vice chairman Isidro Consunji warned that consumers would also deal with water shortages in the future with the suspension of the company’s capital expenditure program.
Manila Water Co. Inc. dropped 6.8 percent to P9.34, while parent Ayala Corp. fell 3.8 percent to P752.
Manila Electric Co., the biggest retailer of electricity, declined 4.7 percent to P303, while JG Summit Holdings Inc. of the Gokongwei Group retreated 4.5 percent to P78.20.
Asian investors, meanwhile, gave a cool welcome Monday to the much-hyped China-US trade agreement, with observers saying they were still waiting for details, while the pound built on gains after last week’s general election win for Prime Minister Boris Johnson.
Tokyo ended 0.3 percent lower, Hong Kong dropped 0.3 percent in the afternoon, and Seoul and Wellington each shed 0.1 percent. Bangkok and Mumbai also retreated.
But Shanghai rose 0.6 percent following forecast-beating data out of China on the key retail and industrial sectors. Sydney climbed 1.6 percent, while Taipei and Jakarta rose.
The world’s two economic superpowers on Friday said they had finally reached a partial deal that will cool down their long-running tariffs row, canceling the imposition of fresh measures and winding back some others.
Anticipation that a pact was near helped fire global markets towards the end of last week, but selling began soon after the announcement was made with Wall Street finishing flat.
Under the agreement Donald Trump agreed to cancel tariffs due on Sunday and lower levies already in place, while China committed to purchases of US manufactured merchandise, energy goods and farm exports, with the text due to be signed early next month.
US Trade Representative Robert Lighthizer hailed Trump’s “remarkable” achievement but Asian markets, which enjoyed huge gains Friday, struggled to gain traction at the start of the week as investors await specifics on the pact.
“There is a lot to be seen in the weeks and months ahead whether we are going to be able to actually deliver on the phase one deal that we just went through,” Ephie Coumanakos, Concord Financial Group managing partner, told Bloomberg TV. “We don’t know all of the specifics.”
“Yes, we have a deal, but trade negotiations will continue,” said Stephen Innes at AxiTrader. “For now, escalation seems to be off the table. However, the path to the comprehensive agreement is still miles away.
“Ultimately, the phase one deal fell short of market expectations and is probably not enough to fully restore business confidence or generate a meaningful recovery in exports or investment.” With AFP
