Shares drop ahead of Fed, BSP policy meetings
PHILIPPINE shares opened the week in the red on cautious trading due to the lack of positive catalysts and ahead of central bank meetings here and abroad.
The Philippine Stock Exchange index (PSEi) lost 54.95 points or 0.79% to close at 6,857.90 on Monday, while the all shares index shed 29.51 points or 0.68% to 4,266.33.
“The lack of a positive catalyst allowed selling pressures to dominate the market,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
“Investors have also taken a cautious stance while waiting for a clear direction on the trend of our COVID-19 (coronavirus disease 2019) cases. Trading was tepid,” he added.
Value turnover dropped to P7.23 billion with 2.29 billion shares switching hands on Monday, nearly half of the P15.22 billion with 1.81 billion issues traded on Friday.
“Philippine shares were off to a slow start this Monday as no economic data releases are on the schedule here and in the US,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“The Federal Reserve will meet… to discuss its policies,” Mr. Limlingan said. “The investors have been anticipating this meeting as the market expects it would give more color on the timing of the Fed’s planned scaling back of its asset purchases.”
“Back home, investors are also waiting for the Monetary Board’s meeting on Sept. 23. Moreover, the August BoP (balance of payments) will be out [this week],” he added.
A BusinessWorld poll last week showed 17 of 18 analysts expect the central bank to keep its policy rate at its record low of two percent as it continues to support the economy despite rising inflation.
Meanwhile, Asian shares eased and the dollar held firm on Monday as the Fed is likely to take another step toward tapering, Reuters reported.
Early Monday, MSCI’s broadest index of Asia-Pacific shares outside Japan dipped another 0.2%, after shedding 2.5% last week.
The Fed is still expected to lay the groundwork for a tapering at its policy meeting on Tuesday and Wednesday, though the consensus is for an actual announcement to be delayed until the November or December meetings.
Majority of sectoral indices closed in the red on Monday except for services, which went up by 9.31 points or 0.50% to finish at 1,839.81.
Meanwhile, mining and oil dropped 249.34 points or 2.63% to 9,197.54; property declined by 42.97 points or 1.41% to 2,996.94; financials shaved off 20.25 points or 1.40% to 1,422.21; industrials dropped 101.40 points or 0.99% to finish at 10,070.56; and holding firms lost 57.30 points or 0.82% to end at 6,929.76.
Decliners beat advancers, 165 against 42, as 36 names closed unchanged.
Net foreign selling decreased to P30.27 million on Monday from the P812.96 million logged on Friday. — K.C.G. Valmonte with Reuters
