PSEi down as property stocks plunge on AC, SMPH

HEAVYWEIGHTS dragged the main index on Wednesday as Mitsubishi Corp. reduced its stake in Ayala Corp. (AC) while the Department of Interior and Local Government’s (DILG) intent to wipe out all reclamation projects in Manila Bay hurt SM Prime Holdings, Inc. (SMPH), which has ambitious projects set in the harbor.

The bellwether Philippine Stock Exchange index (PSEi) shed 1.85% or 148.72 points to 7,864.70. The broader all-shares index declined 1.53% or 73.49 points to 4,715.13.

“Two major headlines dragged the Philippine market, which failed to ride on the upswing of most of the region. First with respect to SMPH, reclamation plans in the Bay area were allegedly scrapped and environmental groups pointed out the potential damage this would cause,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message on Wednesday.

SMPH has a P100-billion reclamation project in the 600-hectare Manila Bay. Dubbed the Future City, the project will consist of commercial and residential components.

But the said project may be put in limbo as the DILG announced last week its plan to review the reclamation projects in Manila Bay in an attempt to protect the environment.

“As for Ayala Corp., a major shareholder, Mitsubishi Corp. divested a substantial portion of its shares, selling these at P900 per share, which is a substantial discount from the previous closing price,” Mr. Limlingan said.

Mitsubishi reportedly sold on Tuesday night some 13 million shares of AC amounting to P225 million. The move was a sequence to the Japanese trading giant’s 2018 selldown of 8.5 million of the conglomerate’s shares at P934 apiece, which then marked a 7.53% discount.

“As both AC and SMPH carry a significant weight in the PSEi, it was natural to witness a big drop today,” he said on Wednesday, noting that the benchmark PSEi failed to ride on the upswing seen across other Asia-Pacific markets.

AC shares dropped 5.31% to P919 each share and SMPH declined 6.92% to P37 apiece.

Foreigners dumped shares on Wednesday, logging net sales worth P1.19 billion, a reversal of the net inflow worth P258.98 million recorded on Tuesday. Losers outnumbered gainers, 127 to 64, while 50 names were unchanged.

All subindices were in the red, except for financials which inched up 0.05% or 1.03 points to 1,804.64.

Property booked the biggest loss, diving 4.49% or 180.11 points to 3,831.58; holding firms plunged 1.79% or 143.47 points to 7,833.12; industrials slid 1.31% or 153.21 to 11,500.58.; mining and oil edged down 0.35% or 31.41 points to 8,798.52; and services dropped 0.07% or 1.21 points to 1,543.68.

Value turnover surged to P20.15 billion as 1.13 billion issues switched hands, compared to Tuesday’s P6.52 billion.

“If the market decides to give back more of its gains, we can find support at 7,700,” said Manuel Antonio G. Lisbona, PNB Securities, Inc. president. •

PSEi: 7,864.70