MANILA – The Philippine Stock Exchange index (PSEi) finished the week’s first trading day up, but the peso depreciated against the US dollar, partly due to the political bickering in the House of Representatives.
The main equities index rose by 0.09 percent, or 5.44 points, to 5,937.05 points.
All Shares increased by 0.22 percent, or 7.97 points, to 3,571.82 points.
Most of the sectoral indices also finished the trade up, led by Mining and Oil with an increase of 3.08 percent.
It was followed by Property, 0.80 percent; Industrial, 0.54 percent; Services, 0.42 percent; and Financials, 0.23 percent.
Only Holding Firms ended the day on the red, with a drop of 0.62 percent.
Volume totaled 11.13 billion shares amounting to PHP5.34 billion.
Gainers led losers at 105 to 96, while 42 shares were unchanged.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, in a reply to emailed questions from the Philippine News Agency (PNA), attributed the main stock index’s performance partly to “signals/reassurance recently from Malacanang that the 2021 national budget would be passed on time with the special sessions of Congress from October 13-16, 2020.”
Another plus is the US stock market’s “new one-month highs and also near record highs amid progress on US stimulus discussions.”
Ricafort said reports saying that US President Donald Trump has been cleared as coronavirus disease 2019 (Covid-19) transmission risk is another positive factor for investors’ optimism, along with news about the fewer uncertainties on the path of US presidential elections, with surveys showing Joe Biden continuously leading the race.
He forecasts the main index’s next resistance level to be around 6,000 to 6,100 levels.
Meanwhile, the peso weakened against the US dollar after ending the day’s trade at 48.47 from 48.305 close Friday last week.
It opened the day at 48.35, little changed from its 48.38 start in the previous session.
It traded between 48.47 and 48.33, resulting in an average of 48.38.
Volume totaled USD600.35 million, higher than the USD562.37 million.
Ricafort traced the peso’s depreciation partly to “uncertainties related to any potential challenges in the House Speakership position and also on the timely approval/passage of the 2021 national budget, which is needed to increase government spending on infrastructure and other Covid-19 programs, all needed for the economic recovery program.”
He, however, said the local currency’s close is still among its near four-year high against the greenback “as the markets await the progress on the 2021 national budget with special Congressional sessions scheduled this week (October 13-16) to ensure timely passage of the 2021 national budget amid changes in the House Speaker position.”
He forecasts the peso to trade between 48.00-48.25 to a dollar on Tuesday. (PNA)
