Markets spooked

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    By RUELLE CASTRO and ANGELA CELIS

    Share prices ended down Monday amid risk aversion as investors took to overseas leads to trade the market.

    Results of the auction on government treasuries meanwhile were mixed.

    The Philippine Stock Exchange index (PSEi) was down 4192 points to 7,797.87, a 0.53 percent drop.

    The broader all shares index was down 22.21 points to 4,633.33, a 0.48 percent drop.

    Losers edged gainers 114 to 80 with 45 stocks unchanged. Trading turnover reached P4.1 billion.

    The peso closed at 50.93 to the dollar, up from 51.09 on Friday.

    The currency opened at 51.08, hit a high of 50.92 and a low of 51.31. Trading turnover reached $1.58 billion.

    With oil and gold higher on geopolitical risk, and the US manufacturing orders weakest in a decade, it was no surprise the Philippine shares slid along with other regional markets,” said Luis Limlingan, managing director at Regina Capital Development Corp.

    Limlingan said gold and oil spiked, following news (unconfirmed at pressime) that ballistic missiles hit te largest US military base Ain Al-Assad in Iraq in retaliation over the killing of Iran’s top military man.

    “President Trump warned of further attack on 52 Iranian sites if provoked further,” he said.

    This development led the US market to drop on Friday.

    Limlingan said “the prospect of sharp retaliation by Iran could keep market participants unnerved in the coming days and weeks.”

    Most actively traded Ayala Land Inc. was down P0.60 to P44.15. Manila Water Co. Inc. was was up P0.38 to P9.60. SM Prime Holdings Inc. was down P0.60 to P42.20. BDO Unibank Inc. was stead at P155. Bank of the Philippine Islands was down P0.50 to P88.50.

    Bloomberry Resorts Corp. was down P0.34 to P10.22. Ayala Corp. was up P9 to P785.

    The Bureau of Treasury meanwhile made a full award of the 91-day and 182-day Treasury bills, while slashing the sold IOUs for the 364-day Tbill, selling instead just P19.104 billion, out of the scheduled P20 billion auction.

    The total bids reached P26.8 billion.

    “Except for the 91-day, rates went up and obviously we all know the reasons because of what emerged following the death of the Iranian general, so there’s this brewing tension now between US and Iran and of course that’s also going to affect in terms of prices of oil, and of course this will be coupled (by) the third tranche of the increase in excise taxes on petroleum products,” said Rosalia de Leon, national treasurer.

    “Given the analysts’ forecast in terms of the December print of inflation, the median is about two, 2.1 percent, so we see the uptrend in terms of inflation. Altogether, these were inputted in terms of the rates submitted by the dealers, by the GSEDs (government securities eligible dealers), during the auction and that’s expected so we also had to cut, temper in terms of the rate, for the one-year paper so it’s a partial award decided by the auction committee,” De Leon added.

    The P6 billion 91-day rate fetched at 3.179 percent, 1.3 basis points (bps) lower than the previous average of 3.192 percent. It attracted tenders worth P9.967 billion.

    The P6 billion half-year Tbill meanwhile was fully awarded with coupons fetching at 3.435 percent, 8.7 bps up compared to the 3.348 percent recorded previous average for the same tenor. The securities attracted offers worth P8.28 billion.

    The Treasury meanwhile opted to limit the sale of the P8 billion one-year government securities after its interest rate hit 3.624 percent, 14.9 bps higher than the previous yield of 3.475 percent. It attracted a total offer of P8.554 billion, with the Treasury just selling P7.104 billion.

    “We’re also aligned with the market, so we’re looking at market rates, the secondaries and the market performance. At the same time, we also have to practice some restraint in terms of the higher yields that we will be accepting, depending also on our requirements… for the first quarter we are already prepared, we know that the budget will already be approved, we have prepared our cash position for the requirement to finance the budget,” De Leon said.