Monetary Board Keeps Rates Steady

Philippine stocks settled in negative territory in the week ending September 24th, as local market players weighed in weakness in China’s manufacturing sector for the current month, as well as the negative outlook for the country’s growth this year.

The shortened trading week saw the Philippine Stock Exchange Index (PSEi) plunging 3.01 percent, settling below the 7,000-mark again after losing 214.36 points in total, to close at 6,917.55. The broader All Shares Index (PSE:ALL) also suffered a 2.1 percent drop, giving up 85.52 points to close at 3,991.08.

Last week, Philippine indexes reversed their rally the week before, after the market absorbed the latest manufacturing PMI from China showing another month of contraction further down economists’ expectations. Official data from Markit / Caixin survey saw a 47 reading for the Chinese manufacturing PMI, down from 47.3 in August, and missing consensus of 47.5.

On Monday, the PSEi fell, following Wall Street’s decline the Friday before. On Tuesday, the 30-stock benchmark fell even further after Manila-based Asian Development Bank cut the country’s GDP growth prospects to six percent, down from the earlier projection of 6.4 percent.

Wednesday saw a huge fallout, as China, the country’s biggest trading partner, recorded another drop in their manufacturing PMI. On Thursday, the market ended mixed as the Monetary Board decided to keep the policy rates unchanged, following its meeting and amidst global volatility and falling domestic inflation.

Last week, the Bangko Sentral ng Pilipinas Monetary Board decided to keep the interest unchanged for both borrowing and lending rates, as well as special deposit accounts.

Overnight borrowing or reverse repurchase facility and overnight lending or repurchase facility were held steady at four and six percent, respectively. Special deposit account rates and reserve requirement ratio were also maintained.

“The Monetary Board’s decision is based on its assessment of the dynamics and risks in the inflation environment over the policy horizon,” BSP Governor Amando Tetangco, Jr. announced during the Monetary Policy Press Briefing held last September 24th.

Tetangco warned that inflation targets for the year may not be reached, with an upside from the worse-than-expected El Nino phenomenon and pending petitions for power rate adjustments.

On Thursday, market performance was mixed, following the announcement. Mining and oil and industrials rallied, while financials managed a slight gain. On the other hand, holding firms declined, while services retreated moderately, while property stocks slid by a few points.

The Philippine Stock Exchange was closed on Friday in observance of the Eidul Adha (Feast of the Sacrifice) of the Moslem community.

In general, publicly-listed firms lost 1.88 percent of their total market capitalization over the week, with property firms losing the most by 5.69 percent, at a combined value of Php 13.44 trillion.

Foreign funds continue to withdraw from the local equity market to safer havens, with net outflows of Php 2.345 billion.

On Thursday, total market value was Php 7.08 billion, slightly down from the Php 7.6 billion the day before, to a total market turnover of Php 28.6 billion.

 

 

Comments

  1. Anonymous says:

    Profit booking in Nifty seen ahead of BREXIT
    Indian Market Outlook:
    Today morning, SGX Nifty is trading at 8216 at 8:35 am IST. As per SGX, Nifty is expected to open at 8216 i.e. at a gap down of 14 points. FII and PRO combined have sold 4411500 shares in Index options yesterday signaling profit booking.
    International Market Outlook:
    The Asian markets along with European and American peers are holding strong too suggesting a global strength in the Indices, however markets have seen a profit booking from the higher levels of S&P at 8120. S&P has been trading in a small range of 2120 to 2106 for last 4 days. The markets are eyeing BREXIT and the US FED meet due on 23rd June and 15th June respectively. The outcomes of these events would be very crucial in deciding the further course of the markets.
    More on: https://www.dynamiclevels.com/en/shailesh-saraf-stock-market-today-100616

  2. Stock Market Today by Shailesh Saraf – 13th June 2016

    Brexit Rocks International Markets

    The Indian Markets are slated to open gap down by 70 points at 8125, as SGX Nifty at 8.43 am. This indicates the panic which will also affect our Markets. The FII & Pro combined have sold above 100000 options in the past 3 trading sessions. If the Markets trade below the low of 8150, which is 2 weeks low, the short term trend will turn to sell.

    International Markets have collapsed as many as 3 surveys are indicating a higher probability of BREXIT. The Markets in the past few days had believed that the “Remain” campaign of the BREXIT would prevail over the “Leave” campaign. The latest Polls have come with a rude shock and the GBP/USD collapsed downwards by 150 ticks, which is an average one day movement, in 15 mins. This nervousness is bound to continue till 23rd June, when the Referendum takes place. Dax has touched its one month low falling 500 points in the past one week. The Asian Markets are reflecting this mood this morning.

    More on – https://www.dynamiclevels.com/en/shailesh-saraf-stock-market-today-130616

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