Peso keeps ground, PSEi starts day with drop

By Joann Villanueva

July 23, 2018, 7:40 pm

MANILA -- The latest statement by US President Donald Trump regarding his preference for a weaker greenback supported the Philippine peso Monday but the Philippine Stock Exchange index (PSEi) declined after investors took to heart Moody’s concern about the country’s political situation.

The local unit finished the day at 53.48 from 53.51 Friday last week, which a trader said, is expected to remain on see-saw in the near term given the strengthening of the US dollar.

Another trader said the local unit got a boost from Trump’s statement regarding the disadvantages of a strong US currency as the world’s largest economy bids to rebalance its economic ties with its trading partners.

With Trump’s recent economic-related statements, the local unit opened stronger at 53.41 from 53.54 in the previous session.

It traded between 53.39 and 53.49 resulting in an average of 53.44.

Volume for the day reached USD399.6 million, lower than the USD474.05 million at the end of last week.

On the other hand, the main stocks gauge went down by 0.31 percent, or 22.81 points, to 7,376.80 points, which a trader said was affected by, among others, the concerns raised by Moody’s Investors Service when it affirmed its investment grade rating on the Philippines at ‘Baa2’ with Stable outlook last Friday.

In a statement, the debt rater said political controversies registered under the Duterte administration may have negative impact on investors’ sentiment on the Philippine economy.

It also said that “prospective changes to governance frameworks”, such as the proposed shift to a federal form of government and the recent Supreme Court decision redefining the share of national government revenue that should be given to local governments, “could have negative implications for public finances.”

With these factors in play, there were mixed sentiment in the local equities market.

The broader All Shares index registered gains of 0.15 percent, or 6.62 points, to 4,473.32 points.

The sectoral indices posted a balanced mix with the Industrial, Mining and Oil and Financials up by 1 percent, 0.47 percent, and 0.22 percent, respectively.

On the other hand, Property registered the highest drop at 0.69 percent and was followed by the Services, 0.46 percent, and Holding Firms, 0.27 percent.

Volume reached 657.02 million shares amounting to PHP5.1 billion.

Gainers led losers at 92 to 88 while 51 shares were unchanged. (PNA)