Lower growth outlook, govt crackdown drag PSEi
Credit to Author: Tyrone Jasper C. Piad| Date: Tue, 21 Jan 2020 17:12:01 +0000
THE stock market ended in the red for the second straight day on Tuesday, slipping out of the 7,500 territory after the International Monetary Fund (IMF) lowered its growth forecasts for the country and four of its regional neighbors and amid continued uncertainties caused by the government’s perceived crackdown on some of the country’s top corporations.
The benchmark Philippine Stock Exchange index (PSEi) slid by 1.14 percent or 85.95 points to close at 7,466.65, while the wider All Shares fell 0.88 percent or 39.56 points to end at 4,434.71.
“Heightened regulatory concerns and IMF’s trimmed growth forecast extended the local market’s losses,” Philstocks Financial Inc. explained in a market note.
In a report, the Washington, D.C.-based financial institution reduced its growth projections for the Philippines, Indonesia, Malaysia, Singapore and Thailand — the so-called Association of Southeast Asian Nations 5 — to 4.8 percent from 4.9 percent for this year and to 5.1 percent from 5.2 percent for 2021.
The IMF said 2020 would be a stabilizing year for the region, adding that growth was expected to pick up by 2021.
Meanwhile, investors remained on the sidelines because of the Duterte administration’s move to review contracts of the country’s corporate giants, with that for the UP Ayala Land TechnoHub the latest to face scrutiny.
Last weekend, Palace spokesman Salvador Panelo said in a radio interview that the TechnoHub could be investigated for allegedly paying rent for less than P20 per square meter only in the last 25 years. Ayala Land Inc. later responded, clarifying that it was paying P171/sqm monthly in accordance with the leasing agreement it signed.
For his part, Regina Capital Development Corp. head of sales Luis Limlingan said “Philippine shares became collateral damage from Moody’s downgrading Hong Kong’s rating to ‘AA3’ from ‘AA2’ [but changing its] outlook to ‘stable’ from ‘negative,’ citing the absence of tangible plans to address the concerns of [its] people.”
Hong Kong stood out among Asian markets on Tuesday, plunging to 2.73 percent after the credit ratings agency revised its rating for the former British colony. The move was a fresh blow to the regional financial hub, which is expected to have fallen into a recession last year owing to the months-long unrest, as well as the US-China trade war.
Wall Street was closed in observance of Martin Luther King Jr. Day.
Asian markets were mostly down. Tokyo fell by 0.91 percent, Shanghai dropped by 1.41 percent, Seoul plunged by 1.01 percent, Jakarta slid by 0.03 percent, Singapore lost 1.23 percent and Thailand shed 0.38 percent. In contrast, Vietnam inched up by 0.67 percent.
In Manila, all sectors again ended in a bloodbath, with financials and holding firms the major losers at 1.56 percent and 1.32 percent, respectively.
Volume turnover stood at 741.11 million shares amounting to P7.76 billion.
Decliners led advancers, 132-67, while 38 issues were unchanged.
WITH A REPORT FROM AFP