Manila, Philippines – Following the market crash in the US, the Philippine Stock Market made a nose dive today. The index closed at 6966.84, which is lower by 162.58 points or 2.28 percent.
The broader all-share index was lower by 1.86 percent. The drop was across the board as all sub-indices closed lower than yesterday.
The worst performing sector is the Property sector, falling by 2.64 percent. The Financials sector followed, dropping by 2.52 percent.
Within the Mining and Oil sector, SMPH led the sub-index lower as it closed at 33.70. This amount is lower by 2.88 percent versus yesterday’s close.
Meanwhile, ALI locked at 38.00, a 2.81 percent drop. MEG ended the day at 4.30, falling by 2.27 percent. VLL closed at 5.10, which is lower by 4.67 percent.
Within the Financials sector, BDO led the sub-index lower as it closed at 115.0. The figure is lower by 3.60 percent versus yesterday’s close.
Furthermore, SECB closed at 137.50, which is lower by 5.17 percent. BPI locked at 81.35, dropping by 1.51 percent. MBT ended the day at 65.30, falling by 1.80 percent.
Gainers and Losers for the Day
The most active stocks today include ALI with PHP 686.20 million in traded value. ICT made it to the top gainers with a traded value of PHP 389.82 million. SMPH also had PHP 282.87 million in traded value.
Significant gainers for the day include PX, increasing by 7.69 percent, PXP by 7.32 percent, and H2O by 4.62 percent.
On the other hand, the notable losers include ECP, falling by 18.20 percent, STR by 13.91 percent, and AB by 11.76 percent. Joining the list are X by 7.98 percent, TBGI by 7.41 percent, and NOW by 11.98 percent.
There were 38 advances and 146 declines, while 34 names remain unchanged. Value turnover totaled PHP 5.355 billion. Foreign exchange rate stood at USD 1: PHP 53.725.
Wage Hike Implications
Earlier in the day, employer groups warned the Metro Manila’s wage board consultation. They argues that the sharp increase in minimum wage will hurt small and medium enterprises. It may cause further inflation hikes.
Almost 50 business groups sent their representatives to the consultation. The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) asks for a PHP 335 increase in the current Metro Manila minimum wage of PHP 475-512 per day.
Another group, the Association of Minimum Wage Earners and Advocates demands an even sharper increase of PHP 688. These requests are due to high inflation that eroded the value of their employees’ take-home pay.
On the other hand, Governor Antonio H. Abad Jr. of the Employers Confederation of the Philippines (ECoP) said that inflation could not be the only reason for an increase in wages. He is wary that should inflation start going down, approved wage hikes could no longer be retracted.
American Chamber of Commerce of the Philippines Chairman, Ernie O. Cecilia added that increasing wages would also increase inflation since the cost of doing business goes up — passing it on to the consumers. He reiterated that the move might scare away investors.
By the looks of it, the government and affected parties need a thorough discussion since a bad decision may actually worsen existing problems.
Index Breaks Support
The Philippine Stock Market dropped again after the crash in US markets. The index fell below the 15 EMA and 20 SMA, and the moving averages aligned bearishly.
Subsequently, MACD poised for a bearish crossover. RSI is also bearish and is not yet at oversold levels.
Estimated support is at 6878 while expected resistance is at 6990 followed by 7143.