PSEi bounces back on bargain hunting

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The main PSEi index bounced back on Wednesday as players hunted for bargains after three consecutive days of declines. 

The Philippine Stock Exchange index (PSEi) gained 30.79 points or 0.49 percent to close at 6,330.46, although more issues settled lower.

The broader All Shares index was down 9.06 points or 0.25 percent at 3,678.80. 

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Losers edged gainers 100 to 88 with 44 stocks unchanged. Trading turnover reached P5.44 billion. 

The market joined regional peers, considering most equity indexes in the region were trending at or near multi-month lows.

A statement by Fitch Solutions pegged Philippine growth this year at 6.3 percent, boosting investor sentiments, according to Philstocks Financial Inc. 

“Trading was tepid, however,” the stockbroker said in a note to investors.

Sentiment was likewise supported by the encouraging remittance figures in November.

Michael Ricafort, RCBC chief economist, said overseas Filipino remittances continued to grow during all the months since January 2021 — despite the pandemic — and remain relatively higher in recent months.

Average year-on-year growth in OFW remittances since the pandemic and over the past five years was steady within 2 to 3 percent, Ricafort said.

This is consistent with, or even higher and better than the country’s population growth and demographics but similar to the country’s average gross domestic product growth since the pandemic, he added.

The peso closed at 58.575 to the dollar, up from 58.62 on Tuesday. The currency opened at 58.65, hitting a high of 58.575 and a low of 58.70. Trading turnover reached $1.37 billion.

Indonesia’s rupiah fell to its lowest in more than five months on Wednesday ahead of the central bank’s monetary policy decision later in the day, while the Thai baht stalled around a seven-week low as US dollar remains dominant.

The Indonesian rupiah slid as much as 0.4 percent to 16,318 per dollar, a level not seen since late July last year. The currency is down more than 1 percent against the dollar so far this year, and has lost around 8 percent from its September peak.

Bank Indonesia (BI) is expected to stand pat on its main interest rate at 6 percent, as per a Reuters poll, as the central bank prioritizes stabilizing the rupiah following recent volatility.

“The possibility of BI keeping rates high for an extended period of time as they prioritize IDR stability, can on its part limit weakness for the currency,” analysts at Maybank said.

A strong US jobs report last week has cemented bets of a much shallower easing cycle by the Federal Reserve than previously expected.

That pushed the dollar to 26-month highs earlier in the week, while the yield on the 10-year Treasury bills is circling a 14-month high.

Like most emerging countries, Indonesia has been hit hard by spiking US yields and the dollar’s rally, a tightening of financial conditions that is restricting BI’s ability to ease policy.

According to Goldman Sachs, Indonesia’s financial conditions have deteriorated sharply since late September, mainly due to the rise in long rates and decline in equities.

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Meanwhile, an index of emerging market currencies was trending slightly higher on the day, rebounding from an over six-month low it fell to on Monday.

The Thai baht was down 0.4 percent, hovering around its weakest level since mid-November last year, while currencies in Malaysia, Singapore, and Taiwan drifted marginally lower.

South Korea’s won gained 0.2 percent. Traders were unfazed by the arrest of impeached President Yoon Suk Yeol over insurrection allegations.

The Bank of Korea (BoK) is expected to deliver a quarter-point rate cut on Thursday, a month earlier than previously expected, as it aims to support the economy which is facing political uncertainty, massive capital outflows and a sharp spike in unemployment.

“This (BoK rate cut) should work against the KRW (won), but the priority will be to support growth,” Min Joo Kang, senior economist for South Korea and Japan at ING, said.

PH shares 

As of 3 pm (Philippine time) most actively traded International Container Terminal Services Inc. was up P5.80 at P395 per share. Ayala Corp. was down P9.50 at P570. BDO Unibank Inc. dropped P0.20 to P143.80. SM Prime Holdings Inc. rose P0.80 to P24.60. Ayala Land Inc. gained P0.70 to P26.20. PLDT Inc. was up P30 at P1,310. Synergy Grid Corp. of the Philippines increased by P0.36 to P12.40. Metropolitan Bank and Trust Co. lost P0.35 to P70.65. Dito CME Holdings Inc. declined P0.14 to P1.86. SM Investments Corp. fell P3.50 to P34.50. (With additional report from Reuters)

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