WORRIES. Fears over the possible impact of higher interest rates on borrowers' capacity to pay contributed to the negative close of the Philippine Stock Exchange index (PSEi) on Friday (March 10, 2023). Amid this situation, the peso managed to end the week sideways against the US dollar due in part to the drop in global oil prices. (PNA graphics)
MANILA – Fears over the impact of higher interest rates on borrowers’ capacity to pay resulted in another slide of the Philippine Stock Exchange index (PSEi) on Friday but the peso managed to end the week sideways against the US dollar.
The main equities index shed 0.29 percent, or 19.39 points, to 6,589.88 points.
All Shares trailed with a drop of 0.25 percent, or 8.8 points, to 3,540.39 points.
Half of the sectoral indices followed the PSEi with Financials declining 1.25 percent; Industrial, 0.56 percent; and Holding Firms, 0.48 percent.
On the other hand, Services rose by 0.55 percent; Property, 0.40 percent; and Mining and Oil, 0.17 percent.
Volume reached 798.74 million shares amounting to PHP8.77 billion.
Decliners led advancers at 119 to 57 while 45 shares were unchanged.
“Philippine shares closed slightly in the red, weighed by financial stocks as investors grew increasingly concerned that higher interest rates would result in banks facing losses on loans due to borrower default,” said Luis Limlingan, Regina Capital Development Corp. head of sales.
Oil prices in the international market went down “on increased worries the Fed (Federal Reserve) may go too far with its interest rate hikes to control inflation, which could cause a recession and reduce future oil demand.”
Brent crude oil futures fell by 1.3 percent to USD81.59 per barrel and the West Texas Intermediate (WTI) by 1.2 percent to USD75.72 per barrel.
Meanwhile, the peso ended sideways against the US dollar after closing the week’s last trading session at 55.17 from Thursday’s 55.24.
It opened the day at 55.17 and traded between 55.28 and 55.13, for an average of 55.203.
Volume reached USD779.8 million, lower than the previous day’s USD926.3 million.
Rizal Commercial Banking Corp. chief economist Michael Ricafort traced the peso’s appreciation partly to the decline in global oil prices and the correction of the greenback’s gauge against other major currencies, as well as the rate of the US’ 10-year Treasury yield.
He said the local currency has depreciated by 1 percent since the start of this year, relative to its 55.755 close in 2022.
Next week, the currency pair is expected to trade between 54.90 and 55.40 while the projected range for Monday is between 55.10 and 55.30. (PNA)
