MANILA -- The week's trading came to a close, seeing a recovery in the Philippine peso, but profit-taking got the better of the Philippine Stock Exchange index (PSEi) as investors cashed in on Thursday’s gains.
The local currency ended the week at 53.97 from 54.07 a day ago, which Landbank market economist Guian Angelo S. Dumalagan traced to sentiments that allow the local unit to “find support at 54.00 after falling to that level this week.”
It opened the day at 54.02, sideways from the 53.99 a day ago, and traded between 53.965 and 54.06, resulting in an average of 54.011.
Volume reached USD660.15, a little more than the USD658.3 million in the previous session.
Dumalagan forecasts the currency pair to trade between 53.70 and 54.20 next week.
He told the Philippine News Agency (PNA) that he remains optimistic that the peso can still improve in the coming months and end the year at a better 53-level if inflation peaks and the Bangko Sentral ng Pilipinas (BSP) further hikes key policy rates.
The BSP has increased its key rates by a total of 100 basis points as inflation sustains its rise.
In the first eight months this year, inflation averaged at 4.8 percent, higher than the government’s 2 percent to 4 percent target band until 2020.
Last August, the rate of price increases rose to a multiyear high of 6.4 percent from month-ago’s 5.7 percent due to faster increases in the prices of fish, rice, meat and vegetables because of supply issues.
With inflation still high, the central bank’s policy-making Monetary Board (MB) is widely expected to hike rates further during the Board’s rate-setting meet on September 27.
On the other hand, PSEi contracted 1.39 percent, or 104.22 points, to 7,413.15 points as risk-off sentiment remains high.
“Philippine shares succumbed to profit-taking after yesterday’s (Thursday’s) last minute buy-up, and also with little market making developments,” Dumalagan said in a market report.
As expected, the Bank of England (BOE) and the European Central Bank (ECB) kept rates steady.
To date, BOE’s interest rate is at 0.75 percent while ECB’s primary interest rate is at -0.4 percent and the main refinancing rate is at zero percent.
BOE, meanwhile, hiked its growth projection for the country this 2018 to 0.5 percent from 0.4 percent after noting the stronger consumer spending.
With these, PSEi’s performance was mirrored by all the other indices, with the broader All Shares down by 1.02 percent, or 47.01 points, to 4,555.30 points.
Property registered the highest drop at 1.94 percent and was followed by Industrial, 1.57 percent; Holding Firms, 1.41 percent; Services, 0.63 percent; Mining and Oil, 0.58 percent; and Financials, 0.57 percent.
Volume was thin at 715.86 million shares amounting to PHP6 billion.
Losers continue to surpass gainers at 115 to 67 while 46 shares were unchanged. (PNA)
