Index falls below 8,000 on JFC, US-China tension
THE LOCAL barometer fell on Wednesday, tracking the negative sentiment in regional markets, alongside the sell-off of shares in Jollibee Foods Corp. (JFC) after the government ordered the company to regularize its workers.
The Philippine Stock Exchange index (PSEi) ended below the 8,000 level yesterday, dropping 0.63% or 51.05 points to close at 7,997.67.
The broader all-shares index also gave up 0.28% or 13.87 points to end at 4,858.03.
“We’re still seeing concerns regarding trade tensions between US and China. So I think we’re still feeling the possible implications. And we basically followed regional markets, the market just focused on that news,” AB Capital Securities, Inc. Senior Equity Analyst Lexter L. Azurin said in a phone interview yesterday.
Most Asian indices edged lower on Wednesday’s close, primarily due to jitters caused by China’s latest response to the United States’ imposition of stricter trade restrictions on around $60 billion worth of Chinese goods.
A sell- off was also seen in shares in JFC, after the Department of Labor and Employment ( DoLE) ordered the fastfood giant to regularize 6,482 workers deployed by two JFC contractors. DoLE also ordered the regularization of 704 workers in burger chain Burger King, to which JFC holds the master franchise.
“Philippine markets sold off heavily in the afternoon after news that DoLE ordered to regularize over 6,000 work force in Jollibee’s management. Not only was this limited to Jollibee, but many other companies that would be affected were suddenly sold down,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said.
This development pulled down the price of JFC stocks by 3.85% to close at P285 each.
Four sectoral counters moved to negative territory, led by services, which ended 1.08% or 18.14 points lower to 1,658.47. Holding firms declined 0.82% or 66.06 points to 7,980.61; financials slipped 0.69% or 14.29 points to 2,044.91, while industrials dropped 0.53% or 61.19 points to 11,310.09.
On the other hand, the mining and oil counter jumped 2.05% or 230.06 points to 11,438.13, while property gained 0.13% or 4.80 points to 3,687.54.
Some 1.67 billion issues exchanged hands for a value turnover of P6.93 billion, slightly higher than Tuesday’s turnover of P6.11 billion.
Decliners narrowly outpaced advancers, 107 to 103, while 46 issues were unchanged. Foreign investors snapped a nine-day selling streak on Wednesday, posting net purchases of P57.46 million against net outflows of P238.61 million on Tuesday.
Meanwhile, Wall Street posted gains overnight as investors saw the slowdown in previous days as an opportunity to look for bargains. The Dow Jones Industrial Average added 1.65% to 24,033.36; the S& P 500 rallied 1.26% to 2,614.45; while the Nasdaq Composite index posted a 1.04% uptick to 6,941.28. •