MANILA, Philippines — Monde Nissin shares tanked on Thursday, as investors sold on the news that Taiwan, France, Ireland and Malta recalled variants of the company’s household instant noodle brand “Lucky Me!” after health authorities found products containing pesticide residues.
Shares in the food giant slumped 7.22% to close at P13.36 apiece, one of the worst performers for the day.
It was worse than the 1.44% decline in the main index.
"I believe that it was mainly affected by the ongoing recall of Lucky Me products in EU & Taiwan due to the presence of Ethylene Oxide," Aniceto Pangan, trader at Diversified Securities, said.
In a disclosure sent to the local bourse 30 minutes before trading closed, Monde Nissin noted that the pesticide detected in their products are "commonly used on spices and seeds to control microbial growth typical in agricultural products.” The company explained that over the course of processing into seasoning and sauces, traces of ehtylene oxide could still be found.
The company said the product recall will also "affect" its other product offerings, including ice cream, sesame seed, spices, and calcium carbonate supplements.
"However towards closing shares were aggressively bought up after falling below 13.00 intraday to finish at 13.36 once Monde emphasized in a statement that Lucky Me! products ‘are Philippine FDA registered and comply with local food and safety standards and even the US FDA standard for Ethylene Oxide,”" Limlingan added.
But beyond the news, Rastine Mercado, research head of China Bank Securities, said Monde Nissin shares could have fallen due to profit-taking.
"I think investors adversely reacted to the news which exacerbated the sell-off. However, MONDE may have already been due for some profit-taking given the extent of its rally since the end of last week," Mercado said.