Market slumps; DITO, LT Group lead decliners

Share prices tumbled Monday along with the rest of Asia as traders continued to fret over the fast spread of the Delta coronavirus variant, which has sent infections spiking and forced some governments to reimpose economically painful lockdowns or other containment measures.

The Philippine Stock Exchange Index slumped 148.13 points, or 2.3 percent, to 6,372.61 on a value turnover of P4.2 billion. Losers overwhelmed gainers, 151 to 49, with 39 issues unchanged.

DITO CME Holdings Corp., the third major telecommunications firm, sank 6.2 percent to P6.98, while LT Group Inc. of airline and tobacco tycoon Lucio Tan fell 5.8 percent to P9.80.

International Container Terminal Services Inc., the biggest port operator and owned by business tycoon Enrique Razon Jr., dropped 4.3 percent to P154.10, while BDO Unibank Inc. of the Sy Group, the largest lender in terms of assets, declined 3.1 percent to P102.30.

Markets in Asia mostly fell Monday morning, led by Hong Kong after Beijing at the weekend further cracked down on China’s tech firms, while education companies were hammered as the government unveiled sweeping reforms of the sector.

The selling extended from Friday, despite a strong lead from Wall Street, where all three main indexes ended at record highs with the Dow ending above 35,000 for the first time.

Investors have a packed agenda of possible market-moving events this week including the Federal Reserve’s latest policy meeting, US economic growth data, and earnings from some of the world’s biggest firms such as Apple and Amazon.

They will also be keeping tabs on a meeting between US Deputy Secretary of State Wendy Sherman and Chinese Foreign Minister Wang Yi later in the day, the highest-level visit by the Biden administration.

The talks come at a time of increasingly strained relations between the superpowers, which have cracked heads over a range of issues including technology, Hong Kong, and human rights.

Hong Kong sank more than four percent with education companies battered after China on Saturday unveiled reforms that will massively change the way they do business.

The news soured the mood elsewhere as Shanghai dropped more than two percent, while there were also losses in Singapore, Seoul, Mumbai, Wellington, and Taipei. But Tokyo rose one percent as traders returned from a four-day weekend break, while Jakarta also edged up. Sydney was flat.

Beijing said the sector had been “hijacked by capital,” adding that it would prevent firms that teach school curriculums from making a profit, raising capital, or going public.

China’s private education sector was worth $260 billion in 2018 according to consultancy and research firm L.E.K. Consulting, driven by a hyper-competitive kindergarten-to-university education system in oversubscribed cities.  

JP Morgan Chase analysts said it was uncertain whether firms could continue to be traded on stock markets under the new regime, adding that “in our view, this makes these stocks virtually un-investable.”

New Oriental Education & Technology Group lost almost half its value in Hong Kong, having dived 41 percent Friday as speculation about the move circulated on social media. Its New York-listed shares collapsed 54 percent. With AFP