Stocks close nearly flat; PLDT, Globe top gainers

The stock market closed almost unchanged Wednesday with nerves settled for now by news that troubled Chinese property giant Evergrande had agreed a plan to repay interest on one of its key bonds, avoiding a default that many fear could hammer the domestic and global economy.

The Philippine Stock Exchange Index added 9.53 points, or 0.1 percent, to 6,890.73 on a value turnover of P6.5 billion. Gainers beat losers, 128 to 82, with 37 issues unchanged.

Telecommunications firms led gainers, with PLDT Inc., the biggest player, rising 5.3 percent to P1,685 and Globe Telecom Inc., the second-largest, climbing 6.8 percent to P3,098.

AC Energy Corp., a unit of conglomerate Ayala Corp., advanced 4.2 percent to P10.84, while noodles maker Monde Nissin Corp. gained 2.5 percent to P19.42.

Asian markets mostly rose on Wednesday. However, confidence remains at a premium as traders await a crucial meeting of the Federal Reserve, where it could announce a timetable to start tapering its vast monetary easing program.

That comes against the ever-present backdrop of spiking coronavirus infections and slowing global growth, as well as a brewing battle over the US debt ceiling that, if not resolved, could see a default in the world’s top economy, potentially sparking another financial catastrophe.

In Asia, eyes were on mainland Chinese markets as investors returned to work from a four-day weekend to catch up with Monday’s rout fanned by feverish talk that one of the country’s biggest developers was close to collapse.

Shanghai ended with gains as investors returned from a four-day weekend.  

Wellington, Mumbai, Bangkok and Jakarta all rose, with Sydney also edging up investors there brushed off news of a rare earthquake that caused damage in the second-largest city of Melbourne.

Tokyo, Singapore and Taipei ended down.

While Tuesday saw a little more stability return to trading floors, there remained a lot of uncertainty and there is a hope that the government will at some point break its silence and give an idea about how it intends to deal with the crisis.

With debts topping $300 billion and no way to make cash, there had been an expectation that it would not be able to meet its interest obligations Thursday on two bonds—one offshore and one domestic—which would put it effectively in default.

However, on Wednesday the firm’s property unit Hengda said it had agreed a plan to repay interest on the local note, providing much-needed relief, though there was no news on the overseas payments.

The Evergrande news “will be helpful and hopefully suppress some of the inevitable volatility and downside after the holiday break,” said Gary Dugan, chief executive officer at the Global CIO Office.

But he added: “For confidence to return more meaningfully, it will need the market to see sight of the broad restructuring plans for Evergrande.”

And observers pointed out that the agreement was vaguely worded as the statement did not specify the amount of interest paid or when. With AFP