Lower weight rating for SMIC drags down index

MANILA, Philippines - The bellwether index fell back to the 6,500 territory following Morgan Stanley Capital International’s lower weight rating for most valuable firm SM Investments Corp. (SMIC).

The Philippine Stock Exchange index declined 1.14 percent or 75.90 points to 6,580.71, snapping a three-day climb. While the broader all shares index shed 0.99 percent or 40.06 points to 3,999.07.

MSCI index recalibrated its list of preferred stocks, putting less weight on SMIC, prompting it shares to plunge 7.73 percent to P805.50 that dragged the main index. Given MSCI’s influence, fund managers and high net investors take note of MSCI’s recommendations.

Astro del Castillo, managing director of First Grade Finance Inc., said share prices also fell because of profit taking and a pause in the climb of Asian bourses.

Regional stocks ended lower given uncertainties over the US Federal Reserve’s timeline in tapering off its bond buying stimulus program.

Japan’s Nikkei 225 sank 2.12 percent or 297.22 points to 13,752.94, while Hong Kong’s Hang Seng index eased 0.01 percent or 1.88 points to 22,539.25.

Wall Street also succumbed to investors’ speculation over the US Federal Reserve’s plan.

The Dow Jones industrial average slipped 0.73 percent or 113.35 points to 15,337.66 while the broader Standard & Poor’s 500 index dropped 0.52 percent or 8.77 points to 1,685.39.

Locally, all counters, save mining and oil that rebounded 0.45 percent or 65.58 points to 14,673.66, were in the red. The decliners were led by holding firms that closed 2.88 percent or 173.98 points lower at 5,866.03.

 

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