Hawkish BSP signal spooks investors
The benchmark Philippine Stock Exchange Index (PSEi) faltered in its attempt to bounce back after Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno raised the possibility of an accelerated monetary tightening to counter rising inflation.
The PSEi, erstwhile staging a comeback from recent losses, fell 0.58 percent or 40.81 points to close on Tuesday at 6,980, while the broader all shares index shed 0.28 percent or 10.41 points to 3,712.39.
Large holding companies and banks dropped after Bloomberg News reported that the BSP would consider increasing the key interest rate in June—sooner than consensus expectations of a rate hike in the second half of 2022.
The BSP’s overnight borrowing rate has been kept at a record-low 2 percent since November 2020 as the local monetary authority strived to support the sagging domestic economy amid the prolonged pandemic.
On the other hand, stocks around the region pared losses following a selloff in China. This was after Beijing pledged further support for the economy.
At the local market, the equities pullback came with thin trading volumes. A total of 549.5 millions shares valued at P4.11 billion changed hands while foreigners cut their holdings by a net figure of P312.2 million.
Overall, gainers nearly matched losers 94 to 91, while 48 companies closed unchanged.
Port operator International Container Terminal Services Inc. was the most actively traded during the session as it slipped 1.41 percent to P223 per share.
It was followed by fiber internet provider Converge ICT Solutions Inc., which went down 0.68 percent to P29.40; Semirara Mining and Power Corp., down 2.08 percent to P28.30; conglomerate SM Investments Corp., down 2.82 percent to P860; and property blue chip Ayala Land Inc., up 1.29 percent to P35.20 per share.
Other heavy movers were: BDO Unibank Inc., down 1.5 percent to P131; Bank of the Philippine Islands, down 0.51 percent to P97.70; PLDT Inc., up 0.21 percent to P1,914; Ayala Corp., down 2.7 percent to P758; and Jollibee Foods Corp., up 1.19 percent to P220.20 per share.
