PSEi ends 3-day winning streak; shares of Manila Water slump

MANILA, Philippines - Philippine shares snapped a three-day winning streak, succumbing to a regional downturn after China cut its 2015 growth target.

China on Thursday said it is aiming to grow its economy by 7 percent this year, below 2014's 7.5 percent goal. This is the country's lowest target in 15 years.

The PSE index fell nearly 0.4 percent to close at 7,819.04.

One of the day's biggest losers was Manila Water, whose shares plunged to as much as 13.3 percent. Manila Water shares closed 10 percent lower at P26.80.

Analysts say Manila Water, partly owned by Ayala Corp., was hit by market speculation that it lost an arbitration case for a rate hike petition.

Manila Water spokesperson Jeric Sevilla said no decision has been issued on the arbitration case.

The news also caused worries for Maynilad's own rate hike. Maynilad's owners Metro Pacific Investments and DMCI Holdings also traded lower.

At the foreign exchange market, the peso weakened to P44.12 against the US dollar.

HK, Shanghai down on China target

Meanwhile, Hong Kong and Shanghai markets sank in Asian trade Thursday after China set tepid 2015 economic and trade growth targets, while the euro fell to 11-year lows ahead of a key European Central Bank meeting.

Wall Street provided a negative lead again despite an upbeat report on the state of the US economy and another round of healthy private-sector jobs growth.

Hong Kong sank 1.11 percent, or 272.43 points to 24,193.04 and Shanghai lost 0.95 percent, or 31.05 points, to 3,248.48.

Sydney ended flat, edging up 2.57 points to 5,904.16 and Seoul was also virtually unchanged, nudging up 0.09 points to 1,998.38. Tokyo added 0.26 percent, or 48.24 points, to close at 18,751.84.

China's National People's Congress, the rubber-stamp legislature, opened with Premier Li Keqiang setting a growth target for this year of "approximately seven percent", which would be the slowest in 25 years.

The goal, which comes after a 7.4 percent rise in 2014, also comes as authorities look to set the world's number two economy on a more sustainable path after decades of breakneck growth.

Authorities also cut their trade growth target for this year to "around six percent" after missing its 7.5 percent goal in 2014 for the third consecutive year.

Over the past several months a slew of data has indicated a slowdown in the economy, including on manufacturing, inflation and trade.

In a work report, Li said China had been hit as the global economy faced headwinds, adding: "Downward pressure on China's economy has continued to mount, and we have faced an array of interwoven difficulties and challenges."

Traders seemed to be unimpressed with news that China will link up the Shenzhen and Hong Kong stock exchanges on a trial basis as part of its financial sector reform. However, Shenzhen's composite index rose 0.27 percent, or 4.53 points, to 1,677.77.

The move follows a similar scheme between Hong Kong and Shanghai that started in November. However, while officials trumpeted that as opening up China's closeted stock markets to the outside world, it has met with tepid demand in both cities.

Dollar-euro parity tipped

Regional investors are also keeping an eye on Europe, where the ECB will outline details of its bond-buying programme -- known as quantitative easing (QE) -- which is aimed at kickstarting the eurozone economy and fending off deflation.

The euro has suffered heavy selling as bank president Mario Draghi prepares to unveil the plan for the 60-billion-euros-a-month scheme.

The single currency fell at one point to $1.1028 Thursday, its lowest level since September 2003, before recovering marginally to $1.1058. That compared with $1.1080 late Wednesday in New York.

It was also at 132.44 yen compared with 132.63 yen in New York and much lower than 133.68 yen earlier Wednesday in Asia.

"The combination of deposit rates negative and QE is a very potent one, so it's very euro negative," Robin Brooks, chief currency strategist at Goldman Sachs, told Bloomberg news in Sydney.

"We have in our forecasts a very pronounced euro downswing, which is probably the most dollar-bullish forecast in all of our forecasts."

He added that the bank saw the dollar-euro reaching parity by the end of next year before the single currency falls further to 90 US cents by the end of 2017.

The dollar fetched 119.83 yen against 119.70 yen in US trade.

US markets ended lower for a second-straight session as dealers brushed off the Federal Reserve report showing the economy expanding moderately while payrolls company ADP said private firms hired more than 200,000 in February.

The Dow fell 0.58 percent, the S&P 500 lost 0.44 percent and the Nasdaq eased 0.26 percent.

On oil markets US benchmark West Texas Intermediate for April delivery was up 12 cents to $51.65 and Brent crude for April down 21 cents at $60.34.

Gold fetched $1,201.68 against $1,204.12 late Wednesday. - With reports from ANC, Reuters and Agence France-Presse

source: www.abs-cbnnews.com

PSEi pulled down by Manila Water, MPIC, Bloomberry

MANILA, Philippines - The Philippine Stock Exchange index (PSEi) is down for a second straight day, dragged down by Manila Water, Metro Pacific and Bloomberry.

The main index dropped 1% to 6,133.24.

The day's biggest loses include Manila Water, which plunged to the most in four years, at 14.5% to P26.50. Investors expressed disappointment over the MWSS order for water firms to cut rates.

Metro Pacific, one of the owners of Maynilad, slipped 6.3% to P4.40.

Enrique Razon's Bloomberry also fell 1.8% to P12.08. The company is in a dispute with its management service provider Global Gaming Asset Management.


At the foreign exchange market, the peso is little changed, closing at 43.86 against the dollar.

Asian stocks mostly lower ahead of Fed meeting

Asian markets were mostly lower in quiet trade on Friday, at the end of a positive week for investors, as attention turns to next week's US Federal Reserve meeting.

Wall Street provided a soft lead, with no fresh cues to spur buying, as dealers await the Fed's plans for its huge stimulus programme.

Tokyo rose 0.12 percent, or 17.40 points, to 14,404.67 thanks to a pick-up in the dollar against the yen, but Sydney drifted 0.44 percent, or 22.9 points, lower to 5,219.6 after almost ending at a five-year high on Thursday.

Seoul finished 0.49 percent, or 9.74 points, down at 1,994.32 while Shanghai shed 0.86 percent, or 19.39 points, to 2,236.22. Hong Kong slipped 0.17 percent, or 38.44 points, to 22,915.28.

Global markets have enjoyed a bright week following a string of upbeat Chinese data -- including on trade and factory output -- indicating the world's number two economy may have turned a corner after suffering a slowdown in the first half of the year.

Figures showed Japan's economy grew faster than initially thought in the April-June quarter while concerns over a possible US-led strike on Syria also abated.

Eyes are now on Washington, where the Fed will hold a two-day policy meeting to decide on its next move for its $85 billion-a-month bond-buying scheme.

Most analysts expect the bank to begin winding it down this month as the US economy strengthens, although last week's below-forecast jobs figures suggest it will only reduce its bond purchases by a small amount.

"A relatively large cutback in purchases of $20 billion or more would suggest the Fed is likely to unwind the programme fairly quickly unless economic conditions deteriorate," CMC Markets' chief market analyst Ric Spooner said in a note, according to Dow Jones Newswires.

On Wall Street, the Dow fell 0.17 percent and the Nasdaq lost 0.24 percent while the S&P 500 slipped 0.34 percent, bringing an end to its seven-session winning streak.

In late Tokyo currency trade the dollar rose to 99.72 yen, compared with 99.47 yen in New York.

The euro was at $1.3289 and 132.53 yen against $1.3298 and 132.33 yen.

The European unit suffered some selling pressure after data showed eurozone industrial output fell 1.5 percent in July compared with June.

European Central Bank president Mario Draghi also gave a cautious outlook on the European economy, calling the recent signs of recovery "still very, very green".

Worries about Syria have abated as US Secretary of State John Kerry and his Russian counterpart hold talks aimed at getting the Assad regime to give up its chemical weapons, and so avoid an American military strike.

Damascus on Thursday said it would sign up to the global convention banning chemical weapons after Russia proposed a plan to put its toxic arsenal under international control.

Global markets dived at the end of last month on expectations of a US attack, which analysts had feared would lead to a wider Middle East conflict.

On oil markets, New York's main contract, West Texas Intermediate for delivery in October, eased 47 cents to $108.13 a barrel and Brent North Sea crude for October $1.35 to 111.28.

Gold cost $1,315.30 an ounce at 0805 GMT compared with $1,341.30 late Thursday. - With ANC and Agence France-Presse

source: www.abs-cbnnews.com

La Mesa dam overflows

MANILA – La Mesa dam in Quezon City has breached its spilling level, an official said Tuesday.

In his Twitter account, Jeric Sevilla, head for corporate communications of Manila Water, said the water level at the dam was already at 80.16 meters as of 11:45 a.m., breaching the spilling level of 80.15 meters.

Evacuation is strongly recommended as flooding is expected to occur in areas surrounding the dam, particularly the Tullahan River area, Fairview and CAMANAVA (Caloocan, Malabon, Navotas and Valenzuela).

source: www.abs-cbnnews.com

Manila Water to raise rates

MANILA, Philippines - Ayala led-Manila Water on Friday said it will raise water rates by P0.08 per cubic meter.

In a disclosure to the stock exchange, Manila Water said it is increasing water rates due to the foreign currency differential adjustment (FCDA). The FCDA of the water bill will be adjusted from 3.19% to 3.49% of the basic charge.



The price increase will take effect in 15 days.

"The tariff adjustment has no impact on the projected net income of the company," said Manila Water, the concessionaire for the East Zone.



The FDCA is as a tariff mechanism formulated to account for foreign exchange loses or gains arising from the payment of concessional loans and foreign currency-denominated borrowings of the Metro Manila Waterworks and Sewerage System (MWSS) as well as loans of the companies for service expansion and improvement of its services.

source: abs-cbnnews.com