Down the drain: Manila Water, Maynilad owners' shares plunge to near-decade low

MANILA, Philippines – Shares of Metro Manila water concessionaires dropped to their lowest levels in almost a decade after the Philippine government revoked the extension of their contracts. 

Investors flushed stocks of Ayala-led Manila Water, as it closed at just P12.48 apiece on Wednesday, December 11, 13.9% lower than a day ago. This is the lowest closing price since April 16, 2009, when it closed at P11.75, according to data from the Philippine Stock Exchange.

It is also Manila Water's sharpest 1-day decline since September 13, 2013, when it dipped 14.5%.

Meanwhile, shares of the owners of Maynilad Water Services also drastically fell.

Manny Pangilinan-led Metro Pacific Investments Corporation (MPIC), which has the controlling stake, closed at just P3.19 per share, 13.1% lower than a day ago. This is the lowest closing price since November 3, 2011, when it closed at P3.10.

It is also MPIC's biggest 1-day dip since September 22, 2009, when it saw a whopping 31.6% drop.

Its partner, DM Consunji Incorporated (DMCI), also suffered a loss of 13.4% and settled at P5.11, the lowest close since September 8, 2010. This is also the stock's biggest 1-day drop since April 27, 2005, when it fell by 16.6%.

Manila Water and Maynilad already waived billions of pesos worth of claims. But President Rodrigo Duterte's officials have not budged, insisting that the agreement end by 2022.

The cancellation casts doubt over the companies' investments, as they have already been planning for until 2037. (READ: Maynilad on revoked extension of deal: 'Very grave concern')

"The [Metropolitan Waterworks and Sewerage System's] act of revoking the memorandum of agreement extending the period of the concession was upon the President's directive, which was in turn based on the [Department of Justice] recommendation [after finding that the extension had no legal basis in the concession agreement]," Justice Secretary Menardo Guevarra had said.

"The ball is now in the concessionaires' court," Guevarra added.

While the water concessionaires' shares plunged to historic lows, the Philippine Stock Exchange index ended in the green at 7,786 on Wednesday, over 50 points or 0.65% higher than on Tuesday, December 10.

The broader all shares also slightly gained at 4,623, up by 0.3%.

Overall, 98 companies advanced, 86 declined, while 53 remain unchanged. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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