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Stocks decline on fresh threats from North Korea

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PHOTO BY PSE

By Krista Angela M. Montealegre, National Correspondent

STOCKS ended a strong week with marginal losses after succumbing to profit-taking on rising geopolitical tensions following fresh nuclear threats from North Korea.

The benchmark Philippine Stock Exchange index (PSEi) settled at 8,281.27 on Friday, down 5.59 points or 0.06% from the closing level on Thursday, after peaking at 8,314.44 in morning trade.

The wider all-shares index gave up 6.61 points or 0.13% to end at 4,878.39.

The PSEi surged 1.23% this week, marked by its ascent to a new record of 8,294.14 on Monday amid optimism on the passage of the comprehensive tax reform package.

“The market did not sustain its momentum this morning, as investor sentiment deteriorated following reports that North Korea could conduct another hydrogen bomb test,” Edgar V. Lay, junior equity analyst at AB Capital Securities, Inc., said in a phone interview.

Stocks fell against a backdrop of weak Asian markets after North Korean Foreign Minister Ri Yong Ho said Pyongyang could conduct a nuclear test in the Pacific Ocean of “an unprecedented scale.”

The senior official was asked what North Korean leader Kim Jong Un meant when he threatened the United States with the “highest level of hard-line countermeasure in history.”

“Philippine shares traded with very little fanfare as the outcomes of the (central bank meetings) were well within market expectations,” Luis A. Limlingan, business development head at Regina Capital Development Corp., said in a mobile phone message.

The Bangko Sentral ng Pilipinas kept the overnight lending rate at 3.5%, the overnight reverse repurchase rate at 3.0% and the overnight deposit rate at 2.5% in its policy meeting on Thursday.

Subsectors finished mixed. Services shed 9.98 points or 0.57% to 1,721.64; industrials dropped 52.78 points or 0.46% to 11,399.80; property lost 16.45 points or 0.41% to 3,952.67; and financials slipped by less than a point to 1,987.17.

Meanwhile, mining and oil climbed 150.50 points or 1.07% to 14,135.25 and holding firms went up 12.71 points or 0.15% to 8,259.17.

Trading value eased to P6.15 billion on Friday from P7.96 billion on Thursday, as 3.07 billion shares were traded.

Decliners overwhelmed advancers, 109 to 93, while 47 issues closed flat.

Net foreign buying accelerated to P322.80 million from P222.18 million in the previous session.

“In the coming weeks, we can expect some correction. The tax reform package is already priced in so there is no catalyst on the local front that could sustain the rally,” AB Capital’s Mr. Lay said.





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