Philippine stocks slump anew in thin trading

Photo taken from pse.com.ph

MANILA, Philippines—Most local stocks slumped for a second session in thin trading on Wednesday, tracking a regional downturn ahead of a crucial European Central Bank meeting and the release of US payrolls data.

The main-share Philippine Stock Exchange index gave up 25.06 points, or 0.48 percent, to close at 5,150.81, sharing in global growth concerns precipitated by the weak US manufacturing data in August.

Joseph Roxas, president of Eagle Equities Inc., said the local market took its cue from the sharp decline in regional stocks, particularly in Hong Kong (the Hang Seng index fell 1.47 percent), while all eyes were set on the upcoming ECB meetings and on the next actions to be taken by the US Federal Reserve.

Investors across the region were edgy on fresh monetary measures that might be taken by these major central banks. On the ECB, markets are awaiting the fine print of a new bond-buying program intended to help debt-strapped countries like Spain and Italy.

Meanwhile, it was reported on Wednesday that inflation for August came in at 3.8 percent, or higher than the market consensus of 3.5 percent.

Investment bank Credit Agricole CIB said that across regional emerging markets, China’s slowdown was “casting a long shadow, with downside risks to growth prevailing.” At the same time, it said risk aversion measures have been rising “in the wake of weak US data and nerves ahead of the ECB meeting.”

Based on the latest ISM report, the US manufacturing sector shrank for the third straight month.

At the local market, value turnover was thin on Wednesday at P3.26 billion as investors lacked fresh incentive to come in a big way. Also, Asia was still in the so-called “ghost” month of the lunar calendar when trading volumes dry up as many investors shy away from making big bets. There were 55 advancers, which were edged out by 86 decliners, while 52 stocks were unchanged.

Earlier in the day, Pepsi Philippines struck an exclusive “multimillion-peso” beverage supply deal with Villar-led Starmalls for the latter’s food court, cinemas, terminals and other areas.