PH stocks continue to sink, peso slightly recovers

MANILA, Philippines – Philippine equities continued to bleed Tuesday, September 27, on foreign selling, failing to join the regional rally over a perceived win by Hillary Clinton in the US presidential debate.

The Philippine Stock Exchange index (PSEi) retreated by 75.12 points or 0.98% to close at 7,557.34; while broader All Shares lost 40.67 points or 0.90% to 4,495.93.

"PSEi failed to join the regional rally as investors [are] still looking for some positive press to jump back into the market. Despite a perceived win by Clinton in the CNN US presidential debate, investors opted to keep on the sidelines to await fresh leads on the upside," Bank of the Philippine Islands (BPI) senior research officer Nicholas Mapa said in an e-mail.

All sectors closed in the red on Tuesday, with mining and oil leading the decline, settling 266.12 points or 2.44% lower than its closing on Monday.

"[This is because] dealers [are] playing defensive ahead of Fed speeches tonight and on Wednesday (September 28)," Mapa added.

PSE president and chief executive officer Hans Sicat echoed Mapa's remarks.

"The market started becoming nervous when the US Federal Reserve rate hike discussion was getting into a full speed. Over the last week, oil and commodity markets have been whiplashed up and down. This had been coincidental with the local news and certain issues with rather not the economic and finance, but on the political side," Sicat said in an interview with Bloomberg on Tuesday.

He added that the continuous outflow of hot money from the equities market is partly due to a "perception gap."

"There is a perception gap. There isn't enough focus on the strides being done by the economic team on the tax reform. They probably have to be commended for the probably fast and definitive manner," Sicat said. (READ: DOF submits first package of tax reforms to Congress)

Peso recovers against US dollar

Meanwhile, the Philippine peso recovered from a two-day losing streak, but continues to trade at a 7-year low.

The Philippine peso gained 8 centavos to close at P48.170:$1 on Tuesday, from P48.250:$1 on Monday. (READ: Peso depreciation 'no cause for concern' - Diokno)

"Foreign selling continues for a 23rd session, albeit at a slower pace. The foreign outflow weighed on the Philippine peso in early trading with the currency pair hitting an intra-session high of P48.405 with weighted average settling at P48.265," Mapa said.

Total foreign selling registered at P3.889 billion, while foreign buying amounted to P3.871 billion.

The local currency, however, managed to close at P48.170, "as dealers booked gains from long-USD positions," Mapa added.

He also noted that there are "investors [who] remained wary of Bangko Sentral ng Pilipinas' possible presence in the foreign exchange market to smooth out sharp swings in the currency's trend and to weed out speculative trading." – Rappler.com