Stocks rose amid thin trading Wednesday although traders remained on edge and analysts warned that the volatility that has characterized trading for most of the year was unlikely to let up any time soon.
The PSEi, the 30-company barometer of the Philippine Stock Exchange, picked up 6 points, or 0.1 percent, to close at 5,853.63 as three of the six subsectors advanced.
The broader all-share index also gained 3 points, or 0.1 percent, to settle at 3,155.58 on a value turnover of P3.7 billion. Losers outmatched gainers, 87 to 82, while 55 issues were unchanged.
Data from the PSE showed that three of the 10 most active stocks ended in the green, led by BDO Unibank Inc. which rose 1.1 percent to P116.00 and SM Investments Corp. which went up 0.7 percent to P764.00.
The peso weakened to 58.965 against the US dollar Wednesday from 58.865 Tuesday on worries the US Federal Reserve may raise Interest rate again.
Federation of Philippine Industries chairman Dr. Jesus Lim Arranza warned against speculative assumptions or projections on the peso-dollar exchange rate. “While I respect the financial minds of the economic experts, if indeed they are what they project to be, airing their speculative thoughts about the movement of the value of the peso against the US dollar will not stop the peso’s floundering value given the influence of external forces beyond our control,” he said.
“However, there is a positive side to the falling value of the peso against the US dollar. With the rising cost of goods because of inflation, Filipinos will be more prudent with their finances,” said Arranza.
Meanwhile, the pound bounced Wednesday on speculation the Bank of England could continue to support troubled financial markets past a deadline set for the end of the week.
The positive turn also helped equity markets in Asia reverse an early selloff. Investors had started the day on yet another gloomy note after a drop on Wall Street in response to an announcement by the BoE that it would stop its emergency bond-buying efforts on Friday, ignoring calls to extend the program to allow markets to stabilize.
The UK central bank was forced last month to step into financial markets to prevent a collapse of pension funds caused by a spike in bond prices after a debt-fueled, tax-cutting mini budget by new finance minister Kwasi Kwarteng sparked fears of a surge in borrowing.
However, a report in the Financial Times said the BoE had told lenders it was ready to continue its emergency program if pensions were at risk.
The pound, which had dropped to as low as $1.0924 Wednesday, shot back to around $1.1020 as angst-ridden investors were calmed.
OANDA’s Craig Erlam said that while BoE boss Andrew Bailey’s “warnings to pension funds this week gave the impression there’s no turning back, it would appear that isn’t entirely true. And that shouldn’t be as surprising as it seemingly is.
“While the hope within the central bank will be that its emergency measures have allowed pension funds to recalibrate and address the vulnerability in the bond market, if that doesn’t prove to be the case it would be ridiculous to pull the rug from under it rather than extend the measures until the end of the month when we get the full budget.” With AFP