Nerve-racking wait for BSP move sends PSEi touching 6,000
MANILA -The Philippine Stock Exchange index (PSEi) briefly lost the 6,000 support level on Thursday before closing the session down from the previous day by 0.59 percent, or 36.01 points, to 6,018.49 amid worries over an off-cycle interest rate hike.
The PSEi hit an intraday low of 5,974.17 while the broader All Shares index slumped 0.69 percent, or 22.81 points, to 3,266.02 before the powerful Bangko Sentral ng Pilipinas (BSP) announced a 25-basis point increase in the afternoon.
Higher rates could weigh on market valuations and raise corporate debt costs, said Gabryle Aguila, head of equity research at Unicapital Securities.
Nevertheless, he said the hike was a “positive” move since it signaled the BSP’s willingness to combat inflation.
“The BSP’s off-cycle rate hike, in our view, is positive as it again seeks to frontload inflation expectations and in this case, tempering [foreign exchange] volatility ahead of the [US Federal Reserve’s] anticipated rate hike next week,” he told the Inquirer.
READ: BSP delivers off-cycle rate hike as price pressures build up
“While this may be an additional dampening factor to consider for equity valuations, it’s also just another incremental click to the cumulative amount of rate hikes so far, and still keeps Philippine equity at a wide discount to fair values,” he added.
Meanwhile, a total of 428.3 million shares valued at P3.1 billion changed hands while net foreign selling hit P319.07 million, data from the stock exchange showed. All subsectors retreated, led by services (-0.91 percent), financials (-0.83 percent) and mining and oil (-0.67 percent).
BDO Unibank Inc. was the top traded stock as it closed flat at P129 per share.
It was followed by Ayala Land Inc., down 0.71 percent to P27.80; Bank of the Philippine Islands, down 1 percent to P99; International Container Terminal Services Inc., flat at P201; and Manila Electric Co., down 2.70 percent to P360 per share.
Emperador Inc. finished flat at P20.75; Metropolitan Bank & Trust Co., down 3.17 percent to P52; SM Prime Holdings Inc., down 0.33 percent to P30.10; Converge ICT Solutions Inc., down 6.29 percent to P8.20; and PLDT Inc., down 0.32 percent to P1,231 per share.
Overall, there were 115 losers against 47 advancers while 51 companies closed unchanged.
