Traders fret more over US tariffs than Philippine politics

FILE PHOTO: PSE Center INQUIRER FILES

MANILA, Philippines — Both equities and fixed-income securities may not be directly impacted by the political turmoil resulting from the arrest of former President Rodrigo Duterte, with investors instead growing more cautious of global trade uncertainties, according to analysts.

Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., said many large investors “do not appear to be particularly perturbed by that issue,” referring to Duterte’s arrest by the International Criminal Court and subsequent flight to The Hague in Netherlands.

“Naturally, they will observe how the situation evolves, but their primary focus is on [US President Donald] Trump, the Fed (Federal Reserve) and US markets,” Colet said in a text message on Wednesday.

This came as the Philippine Stock Exchange Index shed 0.18 percent, or 11.29 points, to close at 6,195.26.

READ: PSEi mirrors global markets slump amid escalating trade wars

Although it slid to as low as 6,123.88 within the day, the decline is much smaller than the 2.18-percent fall the previous day, or when Duterte was arrested on charges of crimes against humanity.

A total of 741.54 million shares worth P5.98 billion changed hands as foreigners made net purchases worth P2.62 million.

Investors snapped up shares of property, industrial and holding firms while shedding banks, mining and services companies.

Losers overpowered gainers, 127 to 77, while 40 companies closed unchanged.

While Duterte’s arrest may have had a hand in the market’s decline, Trump’s tariff policies were still the main culprit, said Japhet Tantiangco, research head at Philstocks Financial Inc.

“Investors also digested the US’ 25-percent tariffs on steel and aluminum imports, which had already taken effect, and the ensuing retaliation from the European Union,” Tantiangco said.

As for the bond market, Philippine Dealing and Exchange Corp. (PDEx) president and CEO Antonino Nakpil said domestic investors remained largely unaffected by local politics.

“Our domestic investors remain hungry … people are looking for yield,” he said.

So far, PDEx has seen P65.7 billion worth of domestic bond listings from five issuances this year. Nakpil remains optimistic about hitting P600 billion in local bond listings this year, surpassing P508.66 billion in 2022.