Stocks end flat; Aboitiz Power up

Stocks closed virtually flat Monday as investors kept a nervous eye on developments in the crisis at troubled Chinese property giant Evergrande as it teeters on the brink.

The Philippine Stock Exchange Index added 4.73 points, or 0.07 percent, to 6,956.26 on a value turnover of P7.6 billion. Losers, however, beat gainers, 120 to 78, with 42 issues unchanged.

International Container Terminal Services Inc. of tycoon Enrique Razon Jr., the biggest port operator, climbed 4.6 percent to P204, while Aboitiz Power Corp. of the Aboitiz Group rallied 4.8 percent to P34.20.

GMA Network Inc., the largest broadcasting company, surged 11 percent to P15.60, while AC Energy Corp. of the Ayala Group rose 3.4 percent to P12.10.

Equity markets mostly rose in Asia on Monday following a broadly positive lead from Wall Street.Hong Kong was among the best performers on bargain-buying after suffering a blow-out last week, though traders were still none the wiser about whether Evergrande paid interest on an offshore bond that was due last Thursday.

While concerns about an economically disastrous collapse of the firm have abated for now, analysts warned there was a long way to go before markets were out of the woods.

Reports at the weekend said Chinese authorities had ordered local housing chiefs to put the company’s cash in ring-fenced accounts to make sure it is used to complete construction projects.

Observers said the move showed homeowners were taking priority for the government as it tries to temper social anger. With AFP

But Beijing has remained largely silent on the crisis, leaving many to guess its plans.

Hong Kong edged up but Evergrande’s electric-vehicle unit slumped by more than nine percent after it scrapped a proposed listing on the Shanghai Stock Exchange and warned it was running out of cash.

Sydney, Seoul, Singapore, Mumbai and Bangkok were all in positive territory, though Shanghai, Wellington and Jakarta dipped.

Tokyo was flat, days ahead of a leadership election in Japan’s ruling party to replace Prime Minister Yoshihide Suga, with optimism that the winner will push for a huge new stimulus package for the stuttering economy.

“Markets seem to be rapidly pricing in Evergrande as a fully controllable outcome that won’t spill over China’s borders into the wider financial universe,” said OANDA’s Jeffrey Halley.

But Shane Oliver, at AMP Capital, warned: “Global fears around contagion from Evergrande have receded a bit but it’s too early to sound the all-clear.

“Shares remain vulnerable to short-term volatility.”

The upbeat start to the week followed gains for the S&P 500 and Dow in New York, where dealers have taken in stride the Federal Reserve’s plan to start tapering its ultra-loose monetary policy.

But there is growing concern about US lawmakers’ failure to lift the debt limit to pay its bills, putting in danger of a default that several people, including Treasury Secretary Janet Yellen, warn would cause an economic catastrophe.

The row comes as Republicans dig in against Joe Biden’s multitrillion-dollar Build Back Better program that would invest in climate change policy; lower childcare and education costs for working families; and create millions of jobs. With AFP