Gaming stocks fall on Duterte’s pronouncements

MANILA, Philippines - Gaming stocks plunged on Friday after President Rodrigo Duterte said in his first Cabinet meeting that online gambling must stop but analysts said it was best to wait for the actual policy issuance of the new administration.

“Online gambling must stop. It’s out of control. I would suggest that sometime soon, licenses must be cut,” Duterte said during his first Cabinet meeting on June 30 after taking his oath of office as the country’s 16th president.

The Roberto Ongpin-led Philweb Corp. suffered the biggest loss as its share price declined 22.13 percent to P19 per share.

DFNN Inc. likewise shed 15.93 percent to close at P5.33 per share while Leisure & Resorts World also declined 6.25 percent to P7.20 per share.

Reacting to the sell-off, Gonzalo Bongolan, vice president of Philippine Commercial Capital Inc. (PCCI) said Duterte’s pronouncements did not come as a surprise but added it would be best to wait for the actual policy issuance.

“The president was firm and consistent with his messages in terms of vices in general. This is not really a surprise….But we have to wait for the implementing rules,” Bongolan said.

Astro del Castillo, managing director at First Grade Finance Inc. said the drop in share prices was a knee jerk reaction but noted some stocks should not have been affected.

Despite the decline in gaming stocks, the market was generally upbeat on Friday.

The benchmark Philippine Stock Exchange index gained 34.10 points or 0.44 percent to close at 7,830.35.

AB Capital Securities expects the PSEi to reach 7,564 for the year, said Victor Felix, equity analyst.

As for specific sectors, Felix said AB Capital is bullish on the banking, consumer and property sectors.

“For consumer stocks, we favor companies which have strong first quarter results and are not related to the junk food / alcohol / tobacco industry,” Felix said.

AB Capital is also recommending banks with strong growth prospects and high upside potential.

“Lastly, we favor property stocks that have an exposure in the consumer and BPO sector. We see rental income as the main earnings driver in the short- and medium-term as residential sales slows down,” Felix said, citing SM Prime Holdings, Robinsons Land Corp. and Megaworld as examples.