Trading at the Philippine Stock Exchange is expected to remain volatile with a downtrend this week, as foreign funds return to the US after the Federal Reserve increased its interest rate last week and suggested further hikes in 2017.
“Following the Fed’s expected 25-basis-point rate hike, eyes are set on local monetary authorities’ sequel response, specifically on directions it would take for 2017. The headline downer was on preliminary indications for three more rate increases next year, which could attract funds flow in favor of dollar-based assets such as bonds,” 2TradeAsia.com said.
Analysts will also closely watch the move of Bangko Sentral ng Pilipinas on wether it will maintain the benchmark rates and its response on the continued weakening of the peso against the dollar.
On the positive side, the continued strengthening of the dollar against the local currency will benefit exporters including listed firms with outsourcing angles and mining/oil-related plays, as the local currency’s weakness translates into higher peso-sales equivalent.
The Philippine Stock Exchange index, the 30-company benchmark, declined 2.7 percent last week to close at 6,860.71 on Dec. 16, while the broader all-share index dropped 1.7 percent to 4,159.42, following the Fed’s expected 25-basis-point rate hike.
Except for the mining and oil index which inched up nearly 1 percent, all other sectoral indices ended in the red, led by property which declined 3.6 percent, industrial which went down 3.4 percent and services which closed lower by 2.6 percent.
The PSEi is now down 1.5 percent since the start of the year.
Foreign investors were net sellers last week by P4.3 billion, as the hawkish Fed pronouncements prodded foreign outflows.
Average daily turnover climbed to P7.5 billion from the previous week’s average of P6.1 billion.
Top gainers last week were Marcventures Holdings Inc. which jumped 31.2 percent to P2.61, Arthaland Corp. which advanced 9.4 percent to P0.465 and San Miguel Corp. which climbed 5.4 percent to P100.
Heavy losers were Ayala Land Inc. which declined 9.7 percent to P31.55, Universal Robina Corp. which lost 7.1 percent to P159 and Energy Development Corp. which dropped 6.2 percent to P5.11.