Mining stocks surge on CA rejection of Gina Lopez appointment

Mining shares at the Philippine Stock Exchange surged yesterday on news of the rejection by the Commission on Appointments of the appointment of controversial Environment Secretary Gina Lopez.

Announcement of the CA rejection of Lopez was made by the CA committee chairman Sen. Manny Pacquiao on television while trading at the Philippine Stock Exchange was still open. Strong buying of mining issues immediately followed, boosting prices of mine companies.

But overall, the market was down. The benchmark Philippine Stock Exchange index (PSEi) finished 20.84 points or 0.27 percent down at 7,682.26. Trading volume was moderate with 3.88 billion shares valued at R5.4 billion traded. However, gainers topped losers, 98-92, with 52 issues unchanged.

All sectoral indeces, except mining, tumbled. The PSE’s mine and oil index surged 339.02 points or 2.73 percent.

“The market struggled to keep above water but the Mining and Oil sector could not care less – it received a much-need, long-awaited boost from the CA roughly an hour before the close,” said Accord Capital Equities Corporation Senior Analyst Justino Calaycay Jr.

The main index shed 20.84 points or 0.27 percent to close at 7,682.26, but the Mining & Oil index jumped 339.02 points, or 2.73 percent, to close at 12,772.82 while all other sectors were in the red.

A total of 3.89 billion shares worth R6.4 billion changed hands. Advancers led decliners 98 to 92 while 52 issues remain unchanged.

“Mining stock investors had a big thorn removed from their collective hearts. After almost a year in ‘limbo’ with unclear policies and directives from Ms. Lopez, including a contestable audit leading to orders of closure – the most recent a ban on ‘prospective’ open pit mining – the sector got a reprieve,” said Calaycay.

He cautioned though there the rejection of Lopez by the CA also raises some uncertainties.

“What happens next? Who will be the next appointee? Will it be the status quo for now? What is the status quo? Are her orders automatically revoked, or will the officer-in-charge order such revocation? Will the OIC have such power? Well, these are questions we will have to deal with in the coming days until the smoke clears. For now, investors are cheering the decision,” said Calaycay.

Gainers in the sector yesterday were led by Apex Mining (up 18.24 percent), Benguet Corporation (15.56 percent), Oriental Peninsula (13.19 percent), Lepanto Consolidated (8.42 percent), and Manila Mining “B” (8.33 percent).

Most active in the sector were shares of nickel mining firms led by Nickel Asia Corporation (up 1.05 percent), Global Ferronickel (up 1.47 percent), Marcventures (up 4.06 percent), and Semirara Mining and Power Corporation (which also has nickel investments) which gained 2.18 percent.