Aug. 15 (Bloomberg) -- SM Investments Corp., the holding company of Filipino billionaire Henry Sy, led a decline in Philippine shares after MSCI Inc. cut the weighting of the company in some of its indexes.
The stock slumped 7.7 percent to 805.50 pesos in Manila, the lowest close since June 26. It was the biggest contributor to a plunge in the Philippine Stock Exchange Index, which fell 1.1 percent, the biggest loss since Aug. 6.
SM Investments was among the top 10 stocks with the biggest cuts in MSCI’s quarterly review. MSCI reduced its weighting in gauges such as its Asia Pacific Index, Emerging Markets Index and South East Asia Index.
“SM Investments dragged the index down, especially since the MSCI weighting cut was unexpected,” Jomar Lacson, an analyst at brokerage Campos Lanuza & Co., said by phone in Manila. “The market’s decline could also be partly traced to losses in some stocks including San Miguel and JG Summit, whose earnings were affected by huge foreign-currency losses.”
JG Summit Holdings Inc. declined 4.8 percent to 40 pesos, the sharpest drop since June 13. The company yesterday said net income in the second quarter fell to 310.8 million pesos ($7.1 million) from 2.56 billion pesos a year earlier on a 2.88 billion-peso foreign-exchange loss.
The peso has weakened more than 6 percent this year, the fourth-worst performer in a basket of 11 Asian currencies tracked by Bloomberg.
“Investors didn’t really expect foreign-currency losses for some of these companies to be this big,” Lacson said.
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