PSEi Index strong 7,000 level.
Mines to be suspended disclosed
Foreign selling in the local bourse due to combination of factors resulted in the weakest close of the Philippine peso since September 2009. The Bangko Sentral ng Pilipinas (BSP) attributed the peso's performance to expectations for the eventual increase in the Federal Reserve rates, and also policy rate decisions by the European Central Bank (ECB) and Bank of Japan (BOJ). The Philippine peso was currently under performing against its regional peers due to local factors such as expected drop in the country's current account surplus, with some even considering a deficit. There were also non-economic factors that were also affecting the domestic financial market but "economic fundamentals remain favorable." A scheduled meeting of the Organization of Petroleum Exporting Countries (OPEC) members in Algeria later this week may have also affected the Peso.
This morning’s debate between US Presidential hopefuls Hillary Clinton and Donald Trump represents the close race between the two protagonists come November. The general consensus is that a Trump victory would mean a loss for Asia as Trump has mentioned increasing trade protectionism and even possibly less military security for the region should he win. A survey conducted by a foreign group about a month ago said that Trump presidency would curtail trade and immigration that would make the PHL and South Korea most vulnerable. We believe this scenario is further adding to the jitters being felt not only with the Peso but also in the local stocks.
The local shares ended lower for the third straight day as investors are feeling jittery with the Peso’s depreciation. The main index fell by 1% to 7,557.34 on value turnover of PhP7.8bn. GTCAP led the most active as it fell by 2% to PhP1450, followed by SMPH (PhP27, -1.3%), MPI (7.02, -1.1%), BDO (103.50, -3.3%), and AC (854.50, -1.6%). BDO plans to raise PhP60bn from a rights issue that would help fund the bank’s medium-term growth strategy. The bank said that it plans to expand its presence in emerging growth areas such as consumer, SMEs and infrastructure-related project spending particularly with the government’s strategy to boost infra projects. Mining shares also performed poorly particularly stocks that were included in the list of companies recommended for suspension as a result of the recent mining audit conducted by the government, led by the Environment Department. Among those recommended for suspension include MARC (1.36, -17%), LC (.182, -13%), LCB (.187, -16%), BC (2.01, -8%), and CPM (0.57, -10%). NIKL unit Hinatuan Mining was also included in the list but the former still managed to post an increase of 2.7% to PhP6.78---perhaps due to the fact that Hinatuan only accounts for less than 1.2% of the total volumes of the parent. NIKL’s main nickel volumes are accounted for by Rio Tuba and Taganito. The DENR is giving the mining firms 7 days to respond before making the decision final.
Top Foreign Buys- AP, LTG
Top Foreign Sells- AC, BDO