Banking and property-related stocks slipped, reflecting reaction to the Monetary Board’s decision from earlier in the week, pulling the local equities market into a modest decline.
The Philippine Stock Exchange index (PSEi) dipped by 0.18 percent or 12.58 points to close at 7,103.55 on Friday, while the broader All Shares index lost 0.81 percent or 3.96 points to 4,195.87.
The Monetary Board of the Bangko Sentral ng Pilipinas (BSP) issued three decisions this week, two of which—revised guidelines on loan-to-value and capital adequacy ratios—hurt sentiment toward the property and banking sectors, analysts said.
“The market, after going up a lot from the past few days, has corrected. Property stocks such as Ayala Land Inc. and Megaworld Corp. are weakening on the recent Monetary Board decisions this week, as well as the banking-related stocks like Security Bank Corp., Bank of the Philippine Islands and BDO Unibank Inc.,” Miguel Agarao, analyst at Wealth Securities Inc., said in a phone interview.
Agarao explained that with the central bank’s decisions, there might be slower growth for banks and lower growth in property sales on decreased downpayment rates. He said the property sector was the biggest loser from the decisions, but banks are also at a loss since “people borrow or loan from banks to buy properties.”
Despite the negativity brought by the central bank decisions, Agarao said the short-term view is favorable on more positive news expected from the third-quarter corporate earnings results, which will be released starting next week.
“Next week, the third-quarter corporate earnings can infuse more positivity into the market. But it still depends as the property and banking-related stocks have a big chunk of the market, which can still have an overhang from the central bank decisions,” he said.
The sectoral indices were split on Friday; financials were off 0.81 percent or 13.56 points at 1,650.53, mining and oil, 0.76 percent or 120.64 points lower at 15,814.42, and property down 0.55 percent or 15.15 points at 2,747.30. Services advanced 0.41 percent or 8.97 points to 2,193.64, industrials inched up 0.09 percent or 10.81 points to 11,475.78, and holding firms went up slightly by 0.02 percent or 1.39 points to 6,125.65.
Decliners outnumbered advancers, 93 to 84, while 37 stocks were unchanged. Total shares traded were high at 20.65 billion shares, amounting to P6.47 billion.
On Thursday, the main PSEi declined by 0.53 percent or 38.09 points to 7,116.13, while the All Shares index also decreased by 0.44 percent or 18.46 points to 4,199.83.