Trading remains sluggish


Local stocks were sluggish on Wednesday ahead of a much-anticipated testimony by the chair of the US Federal Reserve before the American Congress, from which investors hope to find more clues about monetary policy direction in the world’s largest economy.

The main-share Philippine Stock Exchange index shed 8.83 points, or 0.13 percent, to close at 6,574.72, weakening for a second session. Across the region, trading was mixed ahead of Fed Chair Ben Bernanke’s semi-annual monetary report to Congress.

“While I think Bernanke will not be hawkish in his testimony, investors likely have their alternative strategies in place. The tapering and eventual end of QE (quantitative easing) was never a question of if but when,” said Manuel Lisbona, deputy head of PNB Securities.

Bernanke earlier hinted at an end to the QE or the aggressive bond-buying activities that have boosted global liquidity and helped perk up asset markets especially in emerging markets.

Jose Mari Lacson, head of research at Campos Lanuza & Co., said the testimony could validate views on the improving US economy that, in turn, would lead to a tapering of the QE after the third quarter.

“Given that, our market view over the next quarter is volatility. We’ll be in a consolidation pattern. We won’t be looking for excessive returns within volatile period,” Lacson said.

Joseph Roxas, president of Eagle Equities, said investors would await signals on the economy from Bernanke’s testimony. He said the next support levels for the PSEi were at 6,500 and 6,300.

Value turnover was still thin at P6.67 billion. There were only 50 advancers, which were overwhelmed by 97 decliners, while 45 stocks were unchanged.

Citigroup, in a recent research, said the “taper” risk leading to a tighter external funding environment would be a bigger concern for current account deficit countries like India, Sri Lanka, Indonesia and, more recently, Thailand.

Increasing China growth risks would also likely hurt the more trade-linked economies, Citi added, noting that East Asia looked more exposed to a China slowdown risk relative to other regions. The research said a China slowdown would thus be a bigger risk to China-trade linked economies like Singapore, Taiwan and Hong Kong, followed by Korea and Malaysia while Thailand was cited as an “intermediate case.”

“However the Philippines seem the most insulated to both Fed taper and China slowdown,” the research said.—Doris C. Dumlao

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Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.


    AN inch of advance is a lot more to be desired than a foot of retreat.

    Pinakakain na, e, nagrereklamo pa na ang kinakain ay maraming tinik…at kakaunti. Walang kasiyahan. Ang buto ang tinititigan at hindi ang laman.

  • carlcid

    The IMF has unearthed possible landmines in the Philippine economy. There are serious vulnerabilities which the government, in the rush to claim credit for the surge in stock and property prices, has overlooked. The hype about the Philippine economic miracle has lulled banks into thinking that some companies are “too big to fail”.

  • koolkid_inthehouse

    Philippines has nothing to offer to investors. Once the lemmings made money from PSE, they go somewhere else.

  • Guest

    Trading remains sluggish?

    Let it remain that way. It could be worse when the real score on SMC comes to light.

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