MANILA, Philippines – The local financial market suffered badly yesterday, with the benchmark Philippine Stock Exchange Composite (PSEi) spiraling below 7,000 and the peso shedding another 14 centavos to close at 52.32 against the dollar. .
Yesterday’s session saw a sea of red on the trading floor, with the main composite index dropping 310.34 points to close at 6,977.73, the lowest since December 1, 2021. The All Shares Index more wide also suffered a blow, falling 127.46 points to close at 3,739.52.
Overall, investors were in risk aversion mode, scrambling to cut losses as the war between Ukraine and Russia raged with no end in sight, sending commodity prices to record highs. or multi-year and forcing most analysts to reassess their outlook for the global recovery, with some now warning of a period of runaway inflation and weak growth or recession.
Most of the sector indices lost between 3% and up to 5%, with only the mining and oil sector, benefiting from the surge in oil prices, being the latest.
The total turnover reached 12.1 billion pesos. Market breadth was negative with 178 losers versus 57 winners while 21 issues remained unchanged.
First Metro Investment Corp.’s head of research, Cristina Ulang, attributed yesterday’s selloff to “sentiment of risk from rising oil prices and rising inflation expectations.”
These factors, she said, are considered to negatively impact economic growth and corporate profits.
Japhet Tantiangco of Philstocks Financials said that overall investors continued to worry about the possible imposition of sanctions on Russian oil exports.
“The move is expected to result in a spike in oil prices which would cause inflationary pressures. The depreciation of the peso below the 52 to $1 level has also added to the bearish sentiment,” he said.
Meanwhile, Tantiangco noted that trading was still strong with net worth turnover standing at 11.20 billion pesos, still above the year-to-date average of 7.24 billion pesos.
Unsurprisingly, foreign transactions resulted in a net outflow of P850.32 million yesterday.
Ayala Land Inc. topped yesterday’s active stock list, closing down 2.38% to end at P36.90 per share; SM Prime Holdings fell 5.32% to end at P37.40 per share; BDO Unibank fell 4.62% to close at 124 pesos per share; Metrobank fell 5.06% – and ICTSI fell 4.37% to end at P219 per share.
SM Investments Corp. lost 4.20% while Nickel Asia rebounded 8.68%. BPI lost 7.61% to close at 91 pesos per share, as did telecommunications giant PLDT which fell 0.38% to close at 1,842 pesos per share.
Global Ferronickel Holdings, also benefiting from the war-induced commodity price spike, rose 11.94% to end at P3.47 per share.
Among the index members, only the Manila Electric Company closed with gains, climbing 1.41% to 360.00 PPP. Emperador Inc. led the index drop, plunging 10.73% to 15.80 PPP.
The local currency, meanwhile, opened weaker at 52.25 and strengthened to an intraday high of 52.01 before losing steam and hitting an intraday low of 52.34. Volume was heavy at $1.33 billion, down from Monday’s $1.58 billion.
Jonathan Ravelas, chief market strategist at BDO Unibank, said another push towards the 52.50-53 levels was underway. “Any recoil, if any, is limited to the 52 levels,” he said.
Ravelas said the new trading range is between 52 and 53 levels in the short term instead of the 51.60 to 51.90 expected this week.
Rizal Commercial Banking Corp. chief Michael Ricafort said the peso closed at its lowest level in more than two and a half years or since Aug. 28, 2019, when it closed at 52.321 to 1. dollar.
This extended the local currency’s losing streak to five days.
Ricafort said the peso was trading between 52.10 and 52.40 on Wednesday. –Lawrence Agcaoili