|
By Chino S. Leyco, Reporter
THE peso and the stock market fell on Monday as
sentiment turned bearish across Asia on the back of renewed investor
concerns over a possible US recession.
At the Philippine Dealing System, the local
currency slid back to the 41-to-a-dollar level, closing at 41.14
from Friday’s 40.95 finish.
Trading volume reached $759.65 million, higher
than the $676.83 million that changed hands at the close of last
week.
In a research note, UBS Investment Research said
the peso would average 41 to the dollar in the first quarter.
Separately, Standard & Poor’s Ratings
Services (S&P) said that currencies in South East Asia would
appreciate further this year, but at a slower pace than last year.
The US-based company however said the risk to
inflation brought about by increases in oil, food and other
commodity prices is likely to force the Bangko Sentral ng Pilipinas
(BSP) to keep its overnight rates steady in the first six months of
the year.
The BSP has been cutting its rates in lock-step
with a similar monetary easing by its US counterpart, the Federal
Reserve.
“The Philippines has constantly reduced rates
175 basis points which has propelled growth in the period through
consumption and investment,” Subir Gokar, S&P chief economist
said.
The rating company also expects the domestic
economy to grow 5.3 percent to 5.8 percent this year, as long as the
US could maintain a 0.8 percent to 1.2 percent expansion.
But the risks to Philippine growth were
moderate, and higher investment of the national government may push
the economy to faster growth, S&P said.
At the Philippine Stock Exchange, share prices
shed four percent or 120 points to 2,908.88, the composite index’
biggest drop since January 22 this year. Data from the local bourse
showed that this also represented a seven-month low for the index,
which last fell to 2,884.34 points in August last year.
Traders blamed Monday’s slide on risk aversion
after the US reported weaker employment data last Friday.
The broader all shares shaved 3.6 percent or 67
points to 1,792 points with total volume reaching 1.039 billion
valued at P3.4 billion. Losers beat gainers by 122 to 9 while share
prices of 17 firms remained unchanged.
A trader told The Manila Times that the local
market was swept by the declines in other Asian bourses as investors
remain wary of the impending US recession. Japan’s Nikkei index
ended trading almost 2 percent lower at 12,532.1—its lowest close
in more than two years.
Local traders were also likely to stay off the
market given perceptions the BSP would keep its key interest rates
on hold due to the “real” threat of higher inflation.
Astro del Castillo of First Grade Holdings Inc.
said, “bad news is all around,” prompting investors to retreat
as the “reality of a global slowdown finally set in” compounded
by the traditional pre-Lenten sluggishness in the local market. The
analyst said the market may continue to be weak in the near-term
with a reprieve towards the end of the year.
“Initial public offering at this time is only
for the brave,” since firms that plan to sell shares for the first
during these volatile times would have to fight against companies
that would declare dividends for investor attention, he said.
Franscisco Liboro, PCCI Securities Brokers Corp
president, said the market may “pursue to test the 2,950 level”
in the near term and there are selling pressures now until the end
of the first semester. “There would be technical rebounds, blips
along the way,” like a steep cut by the US Fed, he said. “But
until then we would be influenced by Wall Street,” Liboro added.
-- With Likha C. Cuevas-Miel
|
