PHL shares decline as peso continues to weaken

STOCKS closed lower on Tuesday ahead of the release of firms’ second quarter earnings and as the peso continued to weaken against the dollar.

The benchmark Philippine Stock Exchange index (PSEi) went down by 38.70 points or 0.60% to close at 6,349.94 on Tuesday, while the broader all shares index retreated by 11.87 points or 0.34% to 3,409.91.

“The local bourse ended in red territory, mirroring Wall Street’s negative performance, as investors await the release of second-quarter earnings,” Timson Securities, Inc. Head of Online Trading Marc Kebinson L. Lood said in a Viber message.

Mr. Lood said investors are concerned that higher prices, worsening consumer sentiment, and rising interest rates may impact firms’ profitability and result in selling.

“PSEi ended in red as the market anticipates US inflation due out tomorrow (July 13) while peso breaching P56-level once again has led to more foreign outflows and has stirred negative sentiment on index bellwethers, SM and AC, due to both huge dollar debt exposure,” AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message, referring to the ticker symbols of SM Investments Corp. and Ayala Corp.

Net foreign selling climbed to P323.17 million on Tuesday from the P98.20 million recorded the previous trading day.

The peso closed at P56.37 versus the dollar on Tuesday, down by 39.1 centavos from Monday’s P55.979 finish, data from the Bankers Association of the Philippines’ website showed.

This is a new near 18-year low for the local unit as it was its worst close since Nov. 5, 2004’s P56.38 a dollar.

The peso’s intraday low of P56.45 versus the greenback on Tuesday also matched the record low set on Oct. 14. 2004.

Sectoral indices were split on Tuesday. Mining and oil climbed by 105.20 points or 0.95% to 11,096.17; financials went up by 11.37 or 0.75% to 1,526.08; and industrials rose by 29.37 points or 0.31% to 9,371.98.

Meanwhile, holding firms dropped by 90.18 points or 1.49% to 5,942.43; services decreased by 17.44 points or 1.03% to 1,668.28; and property retreated by 8 points or 0.27% to 2,875.46.

Value turnover went up to P4.19 billion on Tuesday with 955.85 million shares changing hands from the P3.75 billion with 775.46 million shares seen the previous trading day, PSE data showed.

Decliners outnumbered advancers, 105 versus 82, while 49 names closed unchanged.

Both analysts said the market may continue moving sideways on Wednesday ahead of the release of the latest US consumer price index data.

Timson Securities’ Mr. Lood placed the PSEi’s support at 5,900 and resistance at the 6,700 area. Meanwhile, AP Securities’ Mr. Temporal put support at 5,700 to 6,000 and resistance at 6,400 to 6,500. — J.I.DP. Tabile