Recently, Manila Water Company, Inc., which is led by the Ayala company, became one of the most actively traded issues. The investors seemed to gamble on the future of the concession agreements that involve the two largest water firms in the Philippines. About P2.44 billion or having a total of 356.51 million shares of Manila Water was exchanged on the trading floor for a span of 5 days from December 16 to 20. It was the 5th most traded stock in the Philippine Stock Exchange data. With this, Manila Water dropped by 25.7% week-on-week and closed at P7.44 per share from P10.02 apiece on Dec. 13. If we take a look at it on a year-on-year basis, it dipped 72.1% since the start of 2019.
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Investors had an important role in the performance of Manila Water. As per the firm, investors have been speculating on the future of the concession agreement of Maynilad Services, Inc. and Manila Water. The attention of investors was caught since the tirades of President Duterte against these two water concessionaires. The uncertainties that emerged because of the issue had an effect on the investors, pushing them to sell.
Despite the issue and the continues sliding of Manila Water, the firm is positive that there is still something to look forward to. Manila Water said that the easing of the concerns with signals of assurance from regulators for the regeneration of the agreements provided something to look forward to by speculators and long-term investors. The company is still hopeful although there have been consecutive doubts by the investors. Let’s how this goes in the following months.
If you haven’t read the issue yet, here’s what you need to know. President Duterte gave the threat to file economic sabotage cases against the two large water companies—Maynilad and Manila Water because of the supposed onerous provisions that are included in their contracts with the government. The revised version of the contracts for these two firms is targeted to be finished before December ends. With the revised contract, the government said that it is giving the two firms an opportunity to renegotiate the terms of their agreement. The fundamentals of the Manila Water are fine but considering this issue, the fate of its share price and the company are unstable because of the developments of the concession agreement talks. This issue changed the picture.