Stock market, peso fall; Diokno transfer cited
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Tue, 05 Mar 2019 16:23:07 +0000
The peso returned to the P52:$1 level while the stock market dipped on Tuesday, with the surprise appointment of Budget Secretary Benjamin Diokno as the new Bangko Sentral ng Pilipinas governor said to be a factor.
The currency, which opened at P51.80 against the greenback and dropped to as low as P52.26 during the day, closed down 52 centavos at P52.24:$1, its lowest since a P52.33:$1 finish on February 18.
The local unit erased all the gains it accumulated since its returned to the P51:$1 level on Wednesday last week.
The bellwether Philippine Stock Exchange index (PSEi), meanwhile, dipped by 0.06 percent or 4.85 points to close at 7,670.62. The wider All Shares declined by 0.17 percent or 8. 07 points to finish at 4,740.90.
“Markets may have viewed the appointment of Diokno as a surprise. A lot were expecting an insider to be chosen,” Union Bank of the Philippines chief economist Ruben Carlo Asuncion said.
He added that the choice of Diokno to replace Nestor Espenilla, who died last month from cancer, “may have the market thinking of government influencing monetary policy more than usual.”
“However, this may also be just a knee-jerk reaction as we will know how the new governor plans to move forward as he starts his term,” Asuncion added.
Eagle Equities Inc. research head Christopher Mangun, meanwhile, blamed the PSEI’s dip on foreign fund outflows and said investors also ignored news that inflation had finally returned to target in February.
Net foreign selling stood at P1.27 billion as foreign funds loaded P3.2 billion worth of issues and disposed of P4.5 billion.
“Despite the good news, investors continue to be scarce and on the sidelines,” Mangun said.
In a separate comment, AAA Southeast Equities Inc. President Matthew Cabangon said investors also stayed on the sidelines following Diokno’s appointment.
“Markets have been asking for a rate cut by the BSP and believe that Diokno’s appointment makes this scenario more likely. We are on a wait and see mode as more clarity surfaces on where the new BSP chief’s stance is,” he said.
The market’s decline was in line most others in Asia.
Tokyo ended 0.4 percent lower, Sydney eased 0.3 percent, Singapore and Seoul were each 0.5 percent off and Taipei dropped 0.4 percent. Bangkok was also down.
But Shanghai jumped 0.9 percent while Hong Kong inched up after China announced hundreds of billions of dollars worth of tax cuts for firms to stimulate the economy.
In Manila, sectoral results were mixed with financials, holding firms, and services the only gainers.
More than 3.5 billion shares valued at P6.6 billion were traded.
Losers led winners, 115 to 89, while 46 issues were unchanged.
WITH A REPORT FROM ANGELICA BALLESTEROS AND AFP
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