Philippines share prices closed 1.7 percent lower on Tuesday with the key index dragged down by an extended selloff in Manila Electric Co (Meralco), the nation's largest power distributor, dealers said. They said Meralco was again punished amid fears its profits will be hurt by a lower tariff rate set by regulators.
The composite index fell 56.84 points at 3,312.30, off the day's low of 3,308.97, on volume of to 2.7 billion shares worth 3.2 billion pesos (68.8 million dollars). Decliners outnumbered gainers 105 to 22, while 44 stocks ended flat.
The broader all-share index slipped 32.28 points at 2,114.57. The local currency traded at 46.508 to the dollar. "The downturn was induced by the selloff in Meralco. It prompted other investors to take profits early on from the recent gains," said Francisco Liboro of PCCI Securities. Liboro said foreign funds further unloaded Meralco shares in anticipation of a stock dividend declaration on Wednesday by the power company.
"The foreign mentality with regard to stock dividends is more negative" than how local investors see it, Liboro said. Meantime some local brokerages "may have imputed in their forecast the full rate hike that Meralco was eyeing." With no firmer leads in sight, investors opted to lock in profits from recent gains in blue chips.
Meralco, the most actively-traded stock, was down five pesos at 85. Meralco affiliate Benpres Holdings Corp lost five centavos to four pesos, while First Philippine Holdings Corp, which is 43 percent owned by Benpres, slipped 2.50 to 75.50 . Fellow blue chip Ayala Corp gave up 25 at 470.
The country's largest mall operator SM Prime Holdings fell 50 centavos to 11.50 pesos while its parent SM Investments Corp, the holding firm of business tycoon Henry Sy, was down 12.50 at 375. San Miguel Corp saw its A shares fall by one to 62.50 while its B shares slipped by 1.50 to 67.