Although swinging back and forth during the Thursday trading session, local equities ended with a slight drop to below 6,200 points as investors avoided banks because of plunging interest rates.
Opening the early trading in red and then green by noon, the Philippine Stock Exchange index (PSEi) dipped slightly by 0.31 percent, or 19.29 points to 6,195.61. The broader all-shares index, however, was up by 0.18 percent, or 6.61 points to 3,799.19.
Rafael Supangco, research head of Angping and Associates Securities Inc., told The Manila Times that interest rates in the country have “bottomed out,” which holds back investors in transacting with banks.
“Investors are really selective right now. With the view that interest rates have bottomed out, investors are avoiding banks,” Supangco said.
He also noted that the local market is still being carried by positive numbers and views worldwide, but is still subjected to the US Federal Reserve meeting, which will take place September 17 to 18, that will supply economic forecasts as well as Fed Chairman Ben Bernanke discussing policy decisions.
For his part, Summit Securities Inc. President Harry Liu said that despite the slowdown, the local equities is seen to move in an upward trend as the “economy is stable and peso should be able to appreciate toward the year end.”
Supangco said that the market is still seen to rally for the next few days from 6,400 to 6,600 points, while by yearend it will settle between 6,500 and 6,800 points.
Majority of the indices ended gained in early trading, but only holding firms and services registered an increase at the end of session. Holding firms added 5.88 points, or 0.11 percent to 5,498.25, and services gained 4.86 points, or 0.25 percent to 1,971.82.
Financials decreased by 0.90 percent, or 13.39 points to 1,474.10, while industrial slumped by 0.94 percent, or 90.22 points to 9,474.11.
Mining and oil went down by 1.67 percent, or 223.18 points to 13,134.73, and property skid by 0.05 percent, or 1.25 points to 2,343.14.
On Wednesday, the PSEi gained 125.18 points, or 2.06 percent to 6,214.90, while the wider all-shares index added 53.86 points, or 1.45 percent to 3,774.39.