Philippine shares closed in negative territory Friday as fund managers realigned portfolios after San Miguel Corp. (SMC) sold part of its holdings in Manila Electric Co. (Meralco) at a discount.
"The market was down with most action on news that SMC sold P17 billion worth of Meralco shares at a discount from the power utility's close yesterday," Joseph Roxas, president of Eagle Equities Inc., told GMA News Online.
"The market tracked the selling price of Meralco shares, pulling the index down," he added.
The main PSEi retreated by 28.93 points or 0.43 percent to 6,619.42 at the noon recess.
More than 1.29 billion shares valued at P26.57 billion were traded. Decliners led advancers 85 to 55 while 56 stocks were unchanged.
Fund managers started rebalancing their portfolios on account of the sell-off in Meralco, said Conrado Bate, president of COL Financial Group Inc.
"The drop in Meralco shares affected different fund managers so they had to rebalance their portfolios," he added.
Meralco was the top index loser, plummeting by 8.20 percent to P277.60 apiece from P302.40.
Roxas noted that SMC was also heavily battered as "investors anticipated a higher price from the expected sale but got otherwise."
SMC stocks recovered from the session's low of P83.90 per share to close at P87.50 apiece, down 0.34 percent from P87.80 Thursday.
SMC said Friday it has placed 64,333,330 shares of common stock in Meralco, equivalent to a 5.7 percent in the utility—at P270 per share or P17,369,999,100.
The price of the share sale was a 10.71-percent discount from Meralco's close Thursday. — VS, GMA News