PSEi falls further after MWSS letdown, ahead of US Fed meeting means BUSINESS

MANILA - Philippine share prices on Friday succumbed to profit-taking for a second session amid a selloff in blue chip firms with interests in water distribution, and ahead of a key US central bank meeting where its economic stimulus may be wound down.

At the Philippine Stock Exchange, the benchmark index fell 62.37 points, or 1.01 percent, to close at 6,133.24. Except for the financial counter, the other sub-indices finished in negative territory led by the 2.73 percent decline of the mining and oil index.

Decliners beat advancers, 98 to 44, while 47 issues were unchanged. A total of 930.83 million stocks worth P6.92 billion changed hands.

Most actively traded stocks were SM Investments, Manila Water, Metrobank, Metro Pacific and Security Bank. Top gainers were LMG, AG Finance and Maybank ATR, while the biggest losers were Manila Water, Anchor Land and Anglo.

"There was some cautiousness in the market because of the obvious, the inevitable tapering of the Fed's quantitative easing program," said Jose Vistan of AB Capital Securities Inc.

"They want to take a safe position of being on the sidelines because the expected scenario is not exactly market-friendly," Vistan said.

The US Federal Reserve is holding its policy meeting on September 17-18 where it is expected to shed light on the future of its economic stimulus. The US central bank's $85-billion bond-buying program – the third tranche of what has come to be called “quantitative easing” (QE3) – has been a key driver of equities rallies in the past several months.

Overnight, the Dow Jones Industrial Average dropped 25.96 points, or 0.2 percent, to 15,300.64 on renewed concern over Syria and expectations of a reduction in the Fed stimulus.

For the second straight session, companies with interests in water utilities continued to take a hit led by Manila Water, which shed 14.52 percent to P26.50 per share.

"The news was released late yesterday and the market had little time to react. Maybe some of the investors didn't know about it until this morning," said Vistan.

Late Thursday, state-run Metropolitan Waterworks and Sewerage System (MWSS) decided to reduce the private concession holders' base rate. 

Metro Pacific shed 6.38 percent to P4.40 each, DMCI lost 1.62 percent to P45.50 apiece and Manila Water parent Ayala Corp fell 0.89 percent to P558 per share.

Metro Pacific and DMCI own Maynilad Water Services Inc, which holds the west zone concession of MWSS, while Ayala owns Manila Water, which controls the east zone.