Peso, stocks index end sideways

MANILA – The peso started the week sideways against the US dollar while the Philippine Stock Exchange index (PSEi) barely moved partly due to the US-China tension and the resurging coronavirus disease 2019 (Covid-19) cases in Europe.

The peso closed the day at 48.365 to a greenback, little changed from its 48.395 close last Friday.

It opened the day at 48.38, also sideways from its 48.46 start in the previous session.

It traded between 48.39 and 48.35, resulting in an average of 48.367.

Volume totaled to USD662.83 million, lower than the USD832.54 million at the end of last week.

ING Bank Manila senior economist Nicholas Mapa said the local currency remains among the best performing currency in the region, with the peso closing to its near four-year high against the US dollar.

He, however, said “the relative strength (of the peso) may actually reflect a fast-fading investment boom with the economic outlook turning even darker on the horizon.”

Mapa said imports have weakened because of the pandemic and this translated partly to weaker demand for the US dollar which, in turn, boosted the peso.

“A modest pick-up in FDI (foreign direct investment), coupled with a surge in foreign borrowings, have also helped support PHP but as the peso continues to strengthen, we lament lost potential output with the investment boom now gone,” he said.

Meanwhile, the main equities index ended the week’s first trading day up by 0.007 percent, or 0.42 points, to 5,909.32 points.

Most of the other counters, however, ended the day on the red, with the All Shares down by 0.14 percent, or 4.81 points, to 3,548.77 points.

Mining and Oil posted the highest drop among the sectors with 0.76 percent, and was trailed by the Services which declined by 0.66 percent; Industrial, 0.32 percent; Financials, 0.29 percent; and Holding Firms, 0.02 percent.

Only the Property index followed the main gauge with a rise of 0.69 percent.

Volume totaled to 2.13 billion shares amounting to PHP4.27 billion.

Losers led gainers at 138 to 58, while 42 shares were unchanged.

“The PSEi closed almost without change amid uncertainty about a fresh round of fiscal stimulus from Washington and the latest update from the Sino-US tension,” Luis Limlingan, Regina Capital Development Corporation head of sales, said.

This after a federal judge issued a preliminary injunction a day before the US government’s decision to ban WeChat takes effect.

The ban by the US government was made after it said that the mobile app owned by Chinese multinational company Tencent, is a security threat.

Meanwhile, fears for a second wave of coronavirus disease 2019 (Covid-19) in Europe have risen due to a spike of cases in the UK, Italy and Belgium, among others.