NextGen Day

The local bourse’s main index recovered on Tuesday as a result of news that an investor had purchased deposits and debts from the defunct Silicon Valley Bank (SVB), but the peso ended the day worse.

The PSEi, which measures activity on the Philippine Stock Exchange, increased by 0.12%, or 8.12 points, to 6.603.15 points.

All Shares then increased by 5.79 points, or 0.16 percent, to 3,519.86 points.

Four of the six sectoral indices — Mining and Oil, 2.10 percent; Services, 1.69 percent; Industrial, 0.25 percent; and Property, 0.02 percent — tracked the primary stock market gauge.

However, Financials and Holding Companies also experienced declines of 0.69 and 0.21 percent, respectively.

911.1 million shares, or PHP5.34 billion, were traded.

95 shares were unchanged, 78 shares advanced, and 95 shares declined.

According to Luis Limlingan, head of sales at Regina Capital Development Corp., “Philippine shares reclaimed its position above 6,600 as traders digested a few positive news reports, including First Citizens Bank shares’ agreement to buy large portions of Silicon Valley Bank.”

Investors, according to him, are also anticipating the publication of a number of American economic indicators, including the consumer confidence survey from The Conference Board and data on home prices.

On the local front, Limlingan claimed that at the conclusion of this quarter, investors will be closely watching the window dressing in the local shares market as well as the most recent banking data.

He claimed that the rise in oil prices came about as a result of Iraq being forced to stop some of its semi-autonomous Kurdistan region’s crude exports and as a result of actions taken to avert a potential banking crisis that may have affected oil demand.

West Texas Intermediate (WTI) crude futures increased by 5.24 percent to USD72.89 per barrel, according to Limlingan, while Brent crude futures increased by 4.17 percent to USD78.12 per barrel.

The peso also declined versus the US dollar, closing the day at 54.45 as opposed to 54.29 on Monday.

It traded between 54.5 and 54.25, averaging 54.376, and started the day at 54.25.

Volume increased from the previous session’s USD1.08 billion to USD1.64 billion.

Michael Ricafort, the chief economist of Rizal Commercial Banking Corp., attributed the peso’s decline to a correction brought on in part by the increase in oil prices on the global market to two-week highs, the improvement in investor sentiment following the announcement that First Citizens Bank & Trust would acquire all deposits and loans of SVB, and the hawkish comments made by some Federal Reserve officials.

According to Ricafort, the peso will fluctuate on Wednesday between 54.35 and 54.55 versus the US dollar.

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