Shares fall, peso steady

    52

    Share prices ended lower Wednesday as investors took to overseas leads to trade the market.

    The Philippine Stock Exchange index (PSEi) was down 104.46 points to 7,739.24, a 1.33 percent drop.

    The broader all shares index was down 52.77 points to 4,595.58, a 1.14 percent drop.

    Losers edged gainers 126 to 60 with 52 stocks unchanged. Trading turnover reached P5.17 billion.

    The peso closed at 50.756 to the dollar, up from 50.76 on Tuesday. It opened at 51.16, hit a high of 50.74 and a low of 51.25.

    Trading turnover reached $1.96 billion.

    “Iran fired missiles on two US army bases in Iraq, while gold surged as investors stayed in cash and safer haven assets with rising geopolitical tensions,” said Luis Limlingan, managing director at Regina Capital Development Corp.

    Limlingan said there are reports that Iran fired “tens of rockets” at two joint US-Iraqi airbase early Wednesday morning Baghdad time, citing the Islamic Revolutionary Guard Corps and confirmed by a US defense official.

    “Wall Street’s main indexes fell on Tuesday, dragged down by oil and healthcare stocks as investors nervously awaited further developments on the US-Iran conflict,” he added.

    Most actively traded Ayala Land Inc. was down P0.15 to P44.05. BDO Unibank Inc. was down P3 to P152. Manila Water Co. Inc. was down P0.66 to P10.12. SM Prime Holdings Inc. was down P0.55 to P41.45. International Container Terminal Services Inc. was down P0.70 to P131.80. SM Investments Corp. was down P12 to P1,055. DMCI Holdings Inc. was up P0.02 to P7. Bank of the Philippine Islands was down P1.15 to P85.40. Ayala Corp. was down P10 to P790.

    Meanwhile, analysts said foreign flows into Asian equities turned positive in 2019 due to diminished fears about a Sino-US trade war and a fall in US interest rates, and analysts expect a recovery in regional economies to help keep the inflows coming in 2020.

    Overseas investors purchased a net $23.47 billion worth of regional equities in 2019, the highest since 2016, data from stock exchanges in India, Indonesia, the Philippines, South Korea, Taiwan, Thailand, and Vietnam showed.

    “Concerns had simmered through the year over geopolitics such as US-China trade and Brexit issues, alongside economic growth concerns,” said Jingyi Pan, a Singapore-based market strategist with financial services firm IG.

    “That said, for investors hunting for returns, riskier assets nevertheless remained in favor.”

    Indian equities led the region with net foreign inflows of $14.7 billion last year, the highest since 2014. Taiwan and Indonesia also drew foreign funds totaling about $6 billion and $3.5 billion respectively.

    DBS bank said that the Indian government’s removal of tax surcharges on foreign portfolio investors and the outperformance of domestic equities helped fuel inflows last year.

    Thailand and Philippines, meantime, registered small outflows in 2019.

    Foreign buying of regional stocks totaled $2.92 billion in December. During the month China and United States agreed on a preliminary trade deal that is expected to be signed on Jan. 15.

    Goldman Sachs said foreign investors “net bought only half of the $50 billion peak-to-trough outflows of 2018 and cumulative FII flows are tracking more than $40 billion below the long-term trend, suggesting room to recover further.”

    MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.4 percent so far this year, after securing 16.3 percent gains in 2019.

    “Going into 2020 on a relatively good note for the outstanding issues from 2019 – including the US-China trade (deal) -Asian equities are expected to continue seeing a steady foreign inflows,” said IG’s Pan.

    “A modest recovery for most Asian economies is expected from 2019 that should keep the outlook positive for the region,” Pan said. – (with Reuters )