July 30 Philippine Stock Market Daily Review

July 30 Philippine Stock Market Daily Review

A reported adverse ruling by the Court of Appeals against the Energy Regulatory Board’s decree that allowed Meralco to raise its electricity rates by 17 cents per kilowatt-hour in June of last year sent the chain of LOPEZ owned companies collapsing at the start of the trading session.  Foreign investors fled in a panic-stricken hysteria that saw Meralco B shares dive by 16.07% while major Meralco stockholder First Philippine Holdings crashed by 13.15%.  Today’s net foreign selling of P 33.602 million in the market was largely due to overseas money stampeding out of the LOPEZ owned energy companies; Meralco B posted P 111.650 million worth or 56.61% of its trades while First Philippine Holdings recorded P 34.227 million or 68.94% of its turnover from foreign money exodus.  In sharp contrast, Meralco local or ‘A’ shares lost only 9.85%, as domestic investors seemed to have contained their consternation arising from the politically sensitive ruling while parent Benpres Corp felt the shockwaves similarly down by a lesser degree at 8.62%.

Ironically, FOUR of the nine heavyweight issues, Globe Telecoms (+.58%), Ayala Corp (+1.81%), San Miguel A (+1.75%) and its foreign or ‘B’ shares (+1.75), were up against only TWO decliners, PLDT (-2.34%) and Bank of the Philippine Islands (-1.17%) while the rest were unchanged. Aside, only Metrobank among the heavyweights accounted for modest foreign money outflows, while the rest of the heavy cap issues recorded moderate inflows. 

Sentiment turned bearish as declining issues walloped advancing issues by 57 to 28 or a ratio of 2 to 1, while industry indices were ALL in the red EXCEPT for the ALL index which was buoyed by the advances in Sunlife (+1.65%) and Manulife (+3.75%).  The OIL index topped the loser’s list down 3.66%, followed by the Banking and Finance lower 1.03%, the Commercial and Industrial index fell .94%, the Mining index skidded .57% and the Property index was least affected down .38%.

The bearish mood sparked by the unsettling news on Meralco encumbered the market from the very start that filtered to most issues in the broader market.  While foreign buying supported most of the heavyweights that resulted to a much-mitigated decline in the Phisix at the end of the session, the corrections in PLDT and Bank of the Philippines Islands apparently had larger effects to the major composite index and had been aggravated by the generally bearish market breadth.  The Phisix at the end of the bell fell by 14.36 points or .9%, one of the minority decliners in the Asian bourse today.

To be continued in our weekly newsletter…