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Stocks, peso slump on global worries

PSEi loses 3.96%, local currency at 32-mo low

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Local stocks plunged nearly 4 percent, giving up most of its gains for the year, while the peso slipped to a 32-month low against the dollar on Tuesday as global investors continued to dump emerging market assets in anticipation of the US Federal Reserve’s tapering of easy money.

At the equities market, technically bearish indicators and a regional downturn caused by geopolitical jitters over Syria added to the day’s dampeners. Locally, a growing public unrest over the reported misuse of public funds by lawmakers may have also soured sentiment.

The main-share Philippine Stock Exchange index shed 244.22 points or 3.96 percent to close at 5,916.99, suffering the worst fall among regional markets on Tuesday. The index slumped by as much as 4.67 percent in intra-day trade before paring losses in afternoon session.

On the other hand, the peso dipped to 44.50-to-$1, the lowest since January 2011 when the peso closed at 44.58: $1. This was 24 centavos weaker than last week’s 44.26: $1 close.

The peso tracked the weakening of other regional currencies amid planned military actions and other sanctions by the United States against strife-torn Syria following reports that the latter’s government used chemical weapons against its citizens.

Meanwhile, the local stock barometer has now wiped out most of its gains for the year after ending 2012 at 5,812.73. The index has surged as much as 27 percent during the peak in mid-May this year but based on Tuesday’s close, the year-to-date gain has narrowed to 1.8 percent. All counters were in the red but the most badly hit were property (-4.93 percent) and holding firms (-4.71 percent) alongside the great rotation of global funds from emerging markets to developed markets.

The PSEi is retesting the lows seen in late June when it first knocked on “bear” territory. At Tuesday’s close, the main index has fallen 1,483.01 points or 20 percent from the historical peak of about 7,400 seen this year.

“Unfortunately, the end of this downturn is nowhere in sight. It’s pretty much currency-related broadly on emerging markets,” said First Metro Asset Management president Gus Cosio.

“It’s still mostly a continuation of the catch-up process that started last week. Foreign investors are still rushing to realign their portfolios on the back of continued fears of a QE (quantitative easing) reduction or termination. That’s why index movers remain to be SM, ALI and PLDT, which were favorites of foreign investors during the bull run,” said Jose Mari Lacson, head of research at Campos Lanuza & Co.

QE refers to the bond buying operations of the US Federal Reserve Board amounting to $85 billion a month. This is meant to stimulate the US economy but over the years, the money helped inflate asset markets in emerging economies.

“But the [domestic] protest actions may also be fueling local investors’ concerns that this may signal a potential weakening of the Aquino administration’s power base and a reduction of its much vaunted political capital. With an angry public on its back, the Aquino administration may find it harder to push its PPP (public-private partnership) projects and even consummate its peace process initiative with the MILF,” Lacson said.


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Tags: global investors , Jose Mari Lacson , Philippine Stock Exchange , Philippine Stock Exchange index , PSEi , stocks , US Federal Reserve

  • 33Sam

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    LIKE A RIGGED LOTTO DRAW, THE NUMBERS ARE REPORTED TO THE VERY FEW IN THE STOCK EXCHANGE SCAM TO WHERE THEY MAKE THE MONEY AND YOU TAKE THE LOSS.

    AS THE MAFIA BANKERS SQUAT ON YOUR TREASURY AND CENTRAL BANK VAULTS, AS THAT WAS PART OF THE DEAL YOU MADE WITH THEM NOT CUTTING YOU OFF FROM U.S. MARKETS OF YOUR PRODUCTS, SO THE CROOKS COULD TAKE THEIR TONG FROM YOUR VAULTS AND MOVE IT OUT OF THE COUNTRY AS BRAZIL WISED UP TO AND TOLD THE CROOKS TO GET FCUKED!!!

    FLIPPERS LOVE GETTING FCUKED!!!

    HIGH-BROW SCAMS FOR MONEY HUNGRY MORONS!!!

  • klepto

    malapit na $1=PHP60, bayad na gt500



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