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PH peso rises to level P55, but the stocks index continues to decline

The Philippine peso strengthened at the end of the week against the US dollar after reaching PHP55, but the main equity index fell once more as investors continued to sell their stocks after last week’s advance.

The local currency traded down from PHP 56.1 on Thursday to PHP 55.71 at the close.

It started the day at PHP56.2, up from PHP56.45 from the previous session’s opening.

It fluctuated between PHP56.2 and PHP55.71, averaging PHP55.983 per USD.

Volume increased to USD1.28 billion from USD898.7 million on Thursday.

The local currency had its highest close in over four months, or since August 12, when it concluded trading at PHP55.61 to the US dollar, according to the chief economist of Rizal Commercial Banking Corporation (RCBC).

He attributed some of the peso’s strength to the anticipated seasonal increase in remittances from overseas Filipino workers (OFWs), which occurs over the Christmas break.

In his words, “despite the poor US economic data recently,” the US dollar has remained weak relative to other major currencies.

He is mentioning, among other things, the ISM Manufacturing index, a significant economic indicator, which last month posted a reading of 49, below expectations. A score above 50 suggests expansion, whereas a score below 50 indicates the opposite.

He expects the peso to fluctuate between 55.30 and 56.00 for the coming week, and between 55.60 and 55.90 on Monday.

The Philippine Stock Exchange index (PSEi), on the other hand, dropped 3.64 percent, or 245.34 points, to 6,489.65 points.

The All Shares fell 2.32 percent, or 81.38 points, to 3,419.65 points, trailing all other counters.

Among the sectoral indices, Holding Firms experienced the largest decline, falling by 5.11 percent.

The financial sector came in second with 2.84 percent, followed by real estate with 2.40 percent, services with 2.32 percent, industrial with 2.05 percent, and mining and oil with 1.41 percent.

A total of 874.3 million shares, or PHP6.32 billion, were traded.

At 108 to 75, losers outnumbered winners while 56 shares remained the same.

The bulk of the regional (bourses) declined as the week came to a close, investors eventually chose to cash out, according to Luis Limlingan, head of sales at Regina Capital Development Corporation (RCDC).

He claimed that economic data releases, such as the US core personal consumption expenditures for October 2022, which increased by 0.2 percent for the month and by 5 percent annually, were also a concern for investors.

The Federal Reserve prefers the core personal consumption expenditure index, which leaves out food and energy.

Before the Fed’s meeting on December 13–14, when the central bank is expected to raise its Fed Funds target rate by 0.50 percent, “market players await the final monthly employment data,” he said.

The West Texas Intermediate (WTI), however, increased by USD0.67 to USD81.22 per barrel, while the Brent crude oil futures declined by USD0.09 to USD86.88 per barrel.

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