PSE index sinks as Ayala-owned firms decline

THE MAIN INDEX took a nosedive on Monday due to the slump in Ayala-owned stocks, which followed remarks from the Office of the President regarding one of the company’s properties in University of the Philippines Diliman.

The 30-member Philippine Stock Exchange index (PSEi) dropped 169.98 points or 2.20% to close at 7,552.60 during yesterday’s session. The broader all shares index likewise plummeted by 76.92 points or 1.69% to 4,474.27.

“Market was affected by the negative statements made by the President on the water concessionaires together with the investigation of the low rental rates given to Ayala Land, Inc. (ALI) at Technohub,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.

Presidential Spokesperson Salvador S. Panelo said in a radio interview Sunday he wants to “probe” the lease rates of ALI at UP-Ayala Technohub, alleging that the company is paying less than P20 per square meter for 25 years.

ALI is the property arm of the Ayala group, which is already tied in a conflict with the government since December, but through its water arm Manila Water Co., Inc. (MWC).

“The PSEi was Asia’s worst performer today with four Ayala companies ending up on our top losers as the government has expressed the intent to probe other businesses owned by the conglomerate,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail on Monday.

Aside from MWC and ALI, listed parent Ayala Corp. and AyalaLand Logistics Holdings Corp. joined yesterday’s list of top 20 losers, shedding 7.06%, 7.003%, 6.60% and 5.30%, respectively.

Other Asian markets performed better on Monday. Japan’s Nikkei 225 and Topix indices gained 0.18% and 0.50%, respectively, while China’s Shanghai SE Composite index increased 0.66% and South Korea’s Kospi index added 0.54%.

All sectoral indices at the PSE also ended in red territory. Property gave up 156.49 points or 3.87% to 3,879.29; holding firms dropped 164.70 points or 2.20% to 7,310.89; mining and oil went down 98.29 points or 1.20% to 8,045.24; industrials declined by 111.09 points or 1.17% to 9,366.33; financials sank 21.17 points or 1.14% to 1,825.74; and services gave up 10.24 points or 0.65% to 1,553.78.

Value turnover stood at P6.28 billion with 913.66 million issues changing hands, from Friday’s P6.27 billion with 1.22 billion issues.

Foreign investors continued to book outflows, with net foreign selling at P512.90 million, bigger than Friday’s net outflow worth P196.07 million.

“Any optimism that investors had vanished today as fears of a natural disaster and of the government’s crusade against oligarchs send prices much lower. The strategy is to look for opportunities in companies that do not correlate with the PSEi’s movement,” Mr. Mangun said on Monday. — Denise A. Valdez