| Philippine stocks fell Monday, extending the key index’s worst decline in four months, on concern a housing slump in the US will dent spending in the nation’s biggest overseas market and cool demand for riskier assets.
“The US is showing signs of slowing down and that’s making investors wary,’’ said Olan Caperina, who helps oversee about $4.7 billion at BPI Asset Management Inc.. “There is also risk aversion toward emerging markets.’’
Metropolitan Bank & Trust Co. and SM Prime Holdings Inc. led declines among the nation’s largest companies. GMA Network Inc. gained on its first trading day after its chairman said second-quarter net income rose from the first three months of the year.
The Philippine Stock Exchange index lost 51.30, or 1.5 percent, to 3,467.46 at the close, after sliding 3.9 percent on July 27. The measure, which dropped as much as 2.4 percent earlier Monday, closed at a two-month low.
Metropolitan Bank, the nation’s largest lender by assets, fell P3, or 4.7 percent, to P60.50, the lowest since May 5. SM Prime Holdings Inc., the largest shopping mall operator, lost 50 centavos, or 4.2 percent, to P11.50.
US shares plunged on July 27 for a second day, sending the Standard & Poor’s 500 Index to its worst weekly drop in five years after the Commerce Department said residential investments fell 9.3 percent in the second quarter, following a 16 percent contraction in the previous three months.
Consumer spending in the US slowed to 1.3 percent, compared with 3.7 percent in the first quarter. The US buys about 16 percent of Philippine exports and accounts for more than half of the funds sent home by Filipinos working abroad.
“As long as US stocks keep going down, riskier assets like emerging markets won’t look attractive,” Caperina said. “This risk aversion will last until investors see some stability in the US.’’
The funds sent home by Filipinos make up 10 percent of the Philippine economy, spurring spending on food, clothing, mobile phone and homes.
Philippine Long Distance Telephone Co., the nation’s largest company by market value, declined P30, or 1.1 percent, to P2,595, the lowest since June 7. Ayala Land Inc., which makes about 30 percent of its home sales to overseas Filipinos and their families, fell 75 centavos, or 4.6 percent, to P15.75.
Megaworld Corp., which makes 20 percent of its home sales to overseas Filipinos, slumped 15 centavos, or 3.9 percent, to P3.70.
GMA Network, the second-largest broadcaster, jumped P2, or 24 percent, to 10.50, from its P8.50 initial share price. Its depositary shares, which were sold at the same price, last traded at P11.
Second-quarter profit exceeded the P441-million net income posted in the first three months of the year, chairman Felipe Gozon told reporters Monday. GMA Network, which earlier this month completed the sale of
P7.8 billion of common and depositary shares, said last week that overseas investors bid for 29 times more than the shares available for sale in the initial public offering.
ABS-CBN Broadcasting Corp., the nation’s largest TV and radio network operator, fell P1.50, or 4.2 percent, to P34.50, its biggest loss since March. The stock has climbed 70 percent and is trading at 30 times its earnings, double that of the main stock measure. ABS-CBN is the third-biggest gainer this year in the 33-member main stock index.
“ABS-CBN appears expensive at the moment,” said James Lago, head of research at Westlink Global Equities. “Some investors are probably switching out, betting they can get better returns from GMA.”
Shares worth P16.92 billion were traded, three times more than the six-month daily average. Losers outnumbered gainers 101 to 25, with 44 stocks unchanged in the broader market.
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