The stock market plunged Tuesday for the second straight day, with conglomerate Ayala Corp. and its units leading the slump after President Rodrigo declared that the government may review their contracts with the state.
The Philippine Stock Exchange Index tumbled 85.95 points, or 1.1 percent, to 7,466.65, on a value turnover of P7.8 billion. Losers overwhelmed gainers, 132 to 67, with 38 issues unchanged.
The Department of Justice has started reviewing the allegedly onerous concession agreement of Manila Water Co. Inc. while Congress is set to investigate the contract of Ayala and Metro Pacific Investments Corp. to operate and extend Light Rail Transit Line 1 to Cavite province.
The government said it may also probe the lease contract of the UP-Ayala Land Technohub in Quezon City.
Ayala Corp. dropped 4.7 percent to P715, while unit Ayala Land fell 2.5 percent to P39.50. Bank of the Philippine Islands, the third-biggest lender in terms of assets and owned by Ayala, declined 4.2 percent to P83.80.
Metro Pacific decreased 3.3 percent to P3.20.
Hong Kong stocks, meanwhile, tumbled Tuesday after the city’s credit rating was downgraded over its response to months of sometimes violent protests, while investors were also spooked by a deadly SARS-like virus that has been confirmed to be transmitted between humans.
With US markets closed for a holiday, traders struggled to find fresh catalysts to continue a long-running rally fueled by the China-US trade pact, lowered Brexit tensions, central bank easing and an improving global outlook.
Among other markets, Tokyo ended 0.9 percent lower, while Shanghai, Singapore and Seoul all sank more than one percent.
Sydney lost 0.2 percent, while Mumbai, Bangkok and Jakarta were also in the red.
Hong Kong was the standout on Tuesday, plunging more than two percent a day after Moody’s said it had lowered its rating in a fresh blow to the financial hub, which is expected to have fallen into recession last year owing to the unrest as well as the China-US trade war.
In a statement, the firm said: “The absence of tangible plans to address either the political or economic and social concerns of the Hong Kong population that have come to the fore in the past nine months may reflect weaker inherent institutional capacity than Moody’s had previously assessed.”
The move comes as the business community grows increasingly worried that the features that give Hong Kong more political and economic autonomy are weakening under pressure from Beijing.
The decision came four months after a similar move by Fitch, which cited the demonstrations and uncertainty caused by closer integration with the Chinese mainland.
There is a growing unease about the spread of a virus from the Chinese city of Wuhan, which has now claimed four lives and sickened more than 200.
The new coronavirus strain has caused alarm because of its connection to Severe Acute Respiratory Syndrome (SARS), which killed nearly 650 people across mainland China and Hong Kong in 2002-2003. With AFP