PSEi drops on profit taking ahead of BSP meeting

PHILIPPINE SHARES declined on Wednesday as investors pocketed gains following the start of the government’s retail bond offer and ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting on Thursday.

The Philippine Stock Exchange index (PSEi) lost 17.60 points or 0.23% on Wednesday to close at 7,349.82, while the broader all shares index shed 3.67 points or 0.09% to 3,958.

“With [the] majority of the Asian markets down on inflationary concerns, [the] local market went on profit taking ahead of the BSP policy setting rate [on Thursday], but net foreign buying continued in today’s trading,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Wednesday.

Net foreign buying slowed to P183.87 million on Wednesday from the P863.03 million seen on Tuesday.

According to a BusinessWorld poll of 20 economists held last week, the BSP is expected to keep the key policy rate at the historic low of 2%. Analysts said the BSP will remain accommodative as the economy has yet to fully recover from the impact of the pandemic.

“Investors booked profits amid the lack of a positive catalyst,” Japhet Louis O. Tantiangco, senior research and engagement supervisor at Philstocks Financial, Inc., said in a Viber message.

“Trading was tepid… below the year-to-date average of P7.34 billion. This shows that many have stayed on the sidelines while waiting for compelling factors to invest,” he added.

Value turnover decreased to P7.46 billion with 832.91 million shares switching hands on Wednesday, lower than the P9.52 billion with 1.19 billion issues traded the previous day.

The market also reacted to the “five-year RTBs (retail Treasury bonds) auction rate and warnings about and risk of infection resurgence with the greater economic reopening,” First Metro Investment Corp. Head of Research Cristina S. Ulang said via Viber.

The Bureau of the Treasury on Tuesday raised an initial P113.545 billion at its price-setting auction for its offer of 5.5-year RTBs. This was oversubscribed by more than five times versus the initial P30-billion offer.

The bonds fetched a coupon rate of 4.625%. This is slightly lower than the 4.750% coupon for the recently reissued Treasury bonds that are also set to fall due in 2027.

National Treasurer Rosalia V. de Leon said the proceeds will fund the government budget. The RTB public offer will run until Nov. 26, unless closed earlier, and the bonds will be issued on Dec. 2.

Sectoral indices were split on Wednesday. Mining and oil gained 173.25 points or 1.81% to finish at 9,702.67; financials rose 18.45 points or 1.15% to 1,609.67; and industrials went up by 19.57 points or 0.18% to 10,748.96. Meanwhile, services declined 18.49 points or 0.91% to 1,996.17; property dropped 25.73 points or 0.77% to 3,312.63; and holding firms gave up 33.73 points or 0.47% to end at 7,119.56.

Advancers beat decliners, 101 against 87, while 58 names closed unchanged. — Keren Concepcion G. Valmonte