The Philippines’ stock market on Wednesday closed 0.84 percent lower, with volumes thin due to more than two hours of halted trades that frustrated investors.
The peso ended stronger.
The Philippine Stock Exchange, the bourse operator, gave no reason for the stoppage, but said it would make further announcements.
The benchmark stock exchange index .PSI opened 0.22 percent lower on Wednesday, but trading was halted after just four minutes.
Trading resumed at 11:56 a.m. and stocks were down 0.36 percent by the noon break. Afternoon trades ran as normal.
The PSEi declined 55.16 points, reaching a closing value of 6,498.88.
The broader all shares index also went down 15.73 points or 0.45 percent.
“Adding to the market’s negative sentiment was the slowdown in S&P Global Manufacturing PMI in December,” Philstocks Research said.
“Furthermore, foreign investors contributed to the market’s decline, recording an outflow of P262.22 million,” it added.
Total value turnover was at P3.11 billion.
“Investors are on the sidelines awaiting for the first inflation print of the year which will be released this Friday. Consensus is at four percent,” Luis Limlingan, managing director at Regina Capital and Development Corp., said.
All sectors were in the red, with financials seeing the largest decline of 1.31 percent.
Advancers however outperformed decliners by a small margin.
Specifically, there were 74 advancing stocks, 71 decliners, and 49 stocks that remained unchanged.
“A market glitch for more than two hours is a terrible way to greet the new year,” Juan Paolo Colet, managing director at investment bank China Bank Capital Corp in Manila, said in a market commentary.
The bourse needs to ensure infrastructure reliability to boost trading volumes, Colet said, adding that many traders were caught off guard by the lack of a timely explanation.
Turnover declined 15 percent to 3.11 billion pesos from a day ago, roughly just half of market’s average 6 billion daily transaction value for 2023.
In January 2022 the stock exchange cancelled trading for an entire day because of technical problems, with more than a third of market participants unable to establish a connection to the core trading engine.
A year ago, the bourse opened late because of a technical issue.
“There is no explanation around the stoppage from authorities, but broad consensus seems to attribute it to system technical glitches which have happened multiple times before,” said Yeap Jun Rong, market strategist at IG.
Stock market capitalization of the Philippines, which trails that of Indonesia, Thailand, Malaysia, and Singapore, inched up 1.1 percent year-on-year to 16.74 trillion pesos ($300.97 billion) as of end-2023, data from the stock exchange operator show.-
The peso closed at 55.57 to the dollar before hitting a low of 55.815. Volume reached $1.88 billion.
Most Asian currencies and equities lost ground in a broad sell-off on Wednesday, as investors stayed cautious on riskier Asian assets amid fading optimism about early US interest rate cuts ahead of the Federal Reserve’s December meeting minutes.
Asian currencies and stocks rallied towards the end of 2023, after an unexpected dovish tilt by the Fed fueled bets that the tightening cycle was over and markets started to anticipate rate cuts would be delivered as early as March.
The US dollar hovered near a two-week high against its major peers on Wednesday, while US Treasury yields hit two-week high overnight.
Markets are now awaiting the minutes of the Fed’s latest policy meeting due later in the day for further clues on rate cuts this year. They are also keenly awaiting a slew of US economic data this week, including job openings and non-farm payrolls.
Inflation data from Thailand due on Thursday and from the Philippines on Friday are also on investors’ radar. – Reuters and Angela Celis
