Stocks suffer another selldown as peso extends record slide

MANILA, Philippines —  Philippine financial markets ended the week in the red, with stocks retreating as investors digested the Bangko Sentral ng Pilipinas (BSP)’s 50-basis-point rate hike while the peso sank to a fresh record low for the third straight trading session.

The benchmark Philippine Stock Exchange index (PSEi) dipped by 0.88 percent, or 51.1 points, to hit 5,728.63, dragged by the BSP’s biggest rate hike in over three years.

The broader All Shares index also fell by 0.86 percent, or 27.67 points, to close at 3,193.29.

Regina Capital Development Corp. head of sales Luis Limlingan said investors are rearranging their portfolios to account for the rate hike. The PSEi was also hit by a selldown caused by the peso depreciation.

“The local bourse ended lower as investors continue to digest the BSP’s 50-bps rate hike, while weaker performance across Asian markets further dampened their sentiment,” Limlingan said.

A total of P4.83 billion worth of shares changed hands, with losers outnumbering winners, 111 to 66, while 56 issues were unchanged.

Meanwhile, data from the Bankers Association of the Philippines showed the peso closed at 63.615 per dollar, weaker by 9.5 centavos from Thursday’s 63.52 finish.

The local currency opened at 63.35, which was also its strongest level for the day, before weakening to as much as 63.62, another record intraday low. It recovered only slightly to 63.615 at the close.

A trader said the same fundamental pressures remained in place, but the BSP’s repeated stance that it does not defend a particular peso level may also be influencing market positioning.

“I think adding to the weakness is BSP’s affirmation that they don’t target a specific level for the peso. So for those speculating, it is like testing BSP’s real threshold,” the trader said.