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Stocks slip, peso weakens ahead of BSP rate setting meet

By Joann Villanueva

February 13, 2023, 7:50 pm

<p><strong>AHEAD OF POLICY MEETING</strong>. The local stock barometer slipped while the peso weakened on Monday (Feb. 13, 2023) as investors stayed at the sidelines ahead of the policy meeting of the Bangko Sentral ng Pilipinas (BSP) on Feb. 16, 2023. Analysts and economists expect the BSP's rates to be hiked by at least 25 basis points. <em>(PNA graphics)</em></p>

AHEAD OF POLICY MEETING. The local stock barometer slipped while the peso weakened on Monday (Feb. 13, 2023) as investors stayed at the sidelines ahead of the policy meeting of the Bangko Sentral ng Pilipinas (BSP) on Feb. 16, 2023. Analysts and economists expect the BSP's rates to be hiked by at least 25 basis points. (PNA graphics)

MANILA – The local bourse’s main index ended Monday in the negative territory ahead of the rate setting meeting of the Bangko Sentral ng Pilipinas (BSP) later in the week, while the peso weakened against the United States dollar.

The Philippine Stock Exchange index (PSEi) shed 0.55 percent, or 38.03 points, to 6,838.76 points.

All Shares slipped by 0.28 percent, or 10.21 points, to 3,642.96 points.

Half of the sectoral gauges tracked the PSEi, namely Holding Firms declining by 1.22 percent; Property, 0.52 percent; and Services, 0.40 percent.

On the other hand, Mining and Oil rose by 0.43 percent, Industrial by 0.20 percent and Financials by 0.05 percent.

Volume reached a little over 1 billion shares amounting to PHP6.6 billion.

Advancers led decliners at 101 to 99 while 39 shares were unchanged.

Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales, said “Philippine shares were sold to start the week as investors will keep their focus on the MB’s (Monetary Board) policy-setting meeting on February 16.”

“So far, economists are split as to whether the BSP will rate the benchmark rates at a slower pace of 25 bps (basis points) or keep the adjustment level at 50 bps,” he said.

This, as domestic inflation rate rose further to 8.7 percent last January from the previous month’s 8.1 percent, which was earlier projected to be the peak for this round of elevated inflation rate for the country.

Meanwhile, the peso finished the day’s trade at 54.76 to a greenback from its 54.42 close last Friday.

It opened the day at 54.5, better than the previous session’s 54.65 start.

It traded between 54.87 and 54.5, resulting in an average of 54.702.

Volume reached USD955.85 million, lower than the USD1.25 billion at the end of last week.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the peso’s weakness partly to the geopolitical concerns between the US and China, hawkish signals from Federal Reserve officials, anticipations for further Fed rate hikes and the impact of the higher-than-expected domestic inflation rate last January.

He said investors are also expecting the BSP to again raise its key rates this week by at least 25 basis points “matching the +0.25 latest Fed rate hike on February 1” and “could also still match any future Fed rate hikes.”

For Tuesday, Ricafort forecasts the peso to trade between 54.65 to 54.85 to a greenback. (PNA)

 

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