Peso posts new high; PSEi down on negative corporate reports

MANILA -- Optimism that the ongoing US-China trade negotiations would bear fruit boosted the Philippine peso on Thursday but the main equities index fell due to uninspiring developments in the corporate front.

The peso ended the day at 51.7 to the dollar, better than its 51.91 close a day ago and is the strongest since finishing the trade at 51.675 on May 4, 2018.

A trader said investors’ hopes are high for the eventual forging of a workable trade agreement between the two largest economies, which will hopefully end uncertainties that mired the financial market in recent months.

ING Bank Manila senior economist Nicholas Mapa also said portfolio inflows since the start of the year are lifting the local unit to date.

Bangko Sentral ng Pilipinas (BSP) data show that net foreign portfolio investments, otherwise known as hot money due to the speed it comes in and out of an economy, posted a net inflow of USD959 million as of the week ending February 15, a turn-around from the USD241.5 million net outflow in the same week last year.

Total inflows to date reached USD2.748 billion, higher than the USD2.249 billion a year ago.

Outflows reached USD1.789 billion, lower than the USD2.49 billion in the same week last year.

Mapa said these investments “chase the relatively higher yields in the region given the dovish comments from the Fed in the past few days.”

He said that since market players are not expecting fresh hikes from the Federal Reserve, following Fed Chairman Jerome Powell’s statement that they will be patient in their key rate decisions, “investors have opted to divert funds back in the region.”

He said the Philippines and Indonesia are now attractive to investors after their respective central banks increased key policy rates in 2018.

For one, the BSP’s key rates were hiked by a total of 175 basis points last year to address the elevated inflation rate, which was due to supply-side factors.
Domestic inflation, however, has decelerated since peaking at 6.7 percent in September and October following the implementation of monetary and non-monetary measures.

On the other hand, the Philippine Stock Exchange index (PSEi) pulled back anew and ended the trade at 7,705.49 points, down 2.33 percent or 183.63 points.

All the other counters also ended in the red, with the All Shares down 1.64 percent, or 79.61 points, to 4,769.75 points.

Financials led the sectors with a decline of 3.03 percent and was followed by the Holding Firms, 2.43 percent; Mining and Oil, 2.24 percent; Industrial, 2.04 percent; Services, 1.78 percent; and Property, 0.91 percent.

Volume reached 2.85 billion shares amounting to PHP17.58 billion.

Losers led gainers at 142 to 56 while 43 shares were unchanged. (PNA)

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http://www.pna.gov.ph/articles/1063250
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