PSEi continues decline

The local stock barometer Thursday slipped for the seventh session in a row as lofty valuations, oil price slump and prospects of rising US interest rates gnawed on investor sentiment.

The main-share Philippine Stock Exchange index lost 14.06 points or 0.18 percent to close at 7,773.31.  The index pulled back by over 100 points in intra-day trade but pared down losses at close as domestic investors picked up shares dumped by exiting foreign funds.

“This market reversal we are seeing is technical. I don’t think it is accurate to say that the outflows are driven by a cautious view  by foreign investors toward (President) Duterte. Keep in mind that the rally we saw this year was not because of Duterte. It was

largely driven by carry trade—that is, funds abroad came rushing to the Philippines as they were looking for yields given the negative interest rates in many OECD  (advanced) economies,” said BPI Securities chief executive Michaelangelo Oyson.

“By the same token, this flow reversal is not about Duterte. It is about market concerns that the (US Federal Reserve) Fed may raise rates soon which will diminish the yield attractiveness of the Philippines as interest rate differential compresses,” Oyson said.

Only the financial index stayed afloat on Thursday as investors picked up shares of Metrobank (+4.67 percent), BPI (+0.47 percent) and Security Bank (+2.16 percent).  Security Bank is set to join the PSEi by Sept. 12. Doris Dumlao-Abadilla