PSEi dips after Fitch outlook, Ukraine crisis worries
SHARES dropped on Monday after Fitch Ratings maintained its negative outlook for the Philippines and amid worsening tensions between Russia and Ukraine.
The benchmark Philippine Stock Exchange index (PSEi) fell by 46.54 points or 0.62% to close at 7,372.25 on Monday, while the broader all shares index declined 7.03 points or 0.17% to 3,916.66.
Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message that sentiment took a hit from Fitch’s decision to maintain its negative outlook for the Philippines’ credit rating.
Fitch last week affirmed the Philippines’ investment grade rating but also maintained the negative outlook, as it flagged uncertainties to the country’s medium-term growth trajectory and hurdles to bringing down debt.
A negative outlook means Fitch could downgrade the Philippines’ credit rating in the next 12 to 18 months. The outlook was revised to negative from stable in July 2021 due to the impact of the pandemic on the economy.
“Philippine stocks opened the week lower dragged by news of deletion of index powerhouse SM Investments Corp. from the FTSE indices effective March 18,” Papa Securities Corp. Equities Strategist Manny P. Cruz said in a text message.
Mr. Cruz said concerns over a potential Russian invasion of Ukraine also weighed on investor sentiment.
US President Joseph R. Biden, Jr. and Russian President Vladimir Putin have agreed in principle to a summit over Ukraine, the French leader said on Monday, offering a possible path out of one of the most dangerous European crises in decades, Reuters reported.
Russian forces have been amassing around its neighbor since late last year, something Western countries say is a prelude to an invasion that could come at any moment.
Russia denies any intention to invade, but nerves were further frayed when the Belarusian defense ministry announced that Russia would extend military drills in Belarus that were due to end on Sunday.
Back home, sectoral indices were split. Property jumped 74.99 points or 2.14% to 3,578.44; mining and oil climbed 143.47 points or 1.24% to 11,656.32; and financials went up 0.36 point or 0.02% to 1,732.26.
Meanwhile, holding firms dropped 167.98 points or 2.38% to 6,882.45; services went down 20.88 points or 1.07% to 1,925.63; and industrials fell 101.83 points or 0.95% to 10,423.37.
Value turnover increased to P9.11 billion with 1.40 billion shares switching hands on Monday from the P7.42 billion with 1.18 billion issues traded on Friday.
Decliners outnumbered advancers, 129 against 72, while 46 names closed unchanged.
Foreigners turned buyers with P320.17 million in net purchases seen on Monday versus the P88.57 million in net outflows seen on the previous trading day. — L.M.J.C. Jocson with Reuters
