Market declines; Pepsi advances

The stock market fell Thursday, dragged down by water-related issues after regulator Metropolitan Waterworks and Sewerage System told a Congressional hearing it revoked the extension of the concession agreements with Maynilad Water Services Inc. and Manila Water Co. Inc. from 2022 to 2037.

The Philippine Stock Exchange Index dropped 45.34 points, or 0.6 percent, to 7,741.07 on a value turnover of P6.2 billion. Losers overwhelmed gainers, 113 to 76, with 50 issues unchanged.

Metro Pacific Investments Corp., which controls Maynilad, slumped 15.7 percent to P2.69, while Manila Water of conglomerate Ayala Corp. tumbled 11.5 percent to P11.04.

Metropolitan Bank & Trust Co., the second-biggest lender in terms of assets, declined 2.9 percent to P66.20, but Pepsi-Cola Products Philippines jumped 34.3 percent to 1.88. 

South Korea’s Lotte Chilsung Beverage offered to acquire shares that it does not own in Pepsi-Cola, a deal valued up to P4.2 billion. Lotte Chilsung wants to buy 2.134 billion common shares at a tender offer price of P1.95 apiece, a 39.3-percent premium over the stock’s closing price of P1.40 on Tuesday.

The rest of Asian equities mostly rose and the dollar was subdued Thursday after the Federal Reserve indicated it was unlikely to change interest rates throughout next year, while the pound was in focus as the UK votes in a general election.

Investors are also tracking developments in the China-US trade talks, with nervousness setting in as a deadline for fresh US tariffs on Chinese goods approaches and no sign yet that they will be delayed.

While negotiations between the economic superpowers is the main focus on trading floors, the Fed’s latest policy announcement took the attention Wednesday.

The central bank, which has cut borrowing costs three times this year, said after a two-day meeting it would hold them for now and set its sights on low inflation and the global economy.

The comments suggest it will stand pat throughout 2020, while Kerry Craig, at JP Morgan Asset Management, said “a sizeable turn in the economic and inflation outlook in either direction will be required for markets to contemplate any sort of move in interest rates”.

The prospect of rates remaining low for some time lifted Wall Street, and most of Asia followed suit.

Hong Kong, Seoul and Taipei each piled on more than one percent, Tokyo ended up 0.1 percent and Singapore jumped 0.9 percent. Mumbai, Bangkok and Wellington were all higher.

But Shanghai dipped 0.3 percent, while Sydney fell 0.7 percent.

There was little fresh news on the trade talks. The general consensus is for Washington and Beijing to eventually reach an agreement as part of a wider deal to end their long-running spat.

However, while both sides have played up the good work so far, there are growing worries that the US will not cancel or delay fresh levies due on December 15, which observers fear could block any further progress in the negotiations. With AFP