Philippine shares retreat before BSP policy meeting

Philippine shares dropped anew on Wednesday as the conflict between Iran and Israel continued and as investors stayed on the sidelines ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting on Thursday, where it is expected to deliver a second straight rate cut.

The main Philippine Stock Exchange index (PSEi) went down by 0.49% or 31.76 points to close at 6,337.43, while the broader all shares index declined by 0.29% or 11.07 points to 3,772.79.

“Philippine stocks fell as the Israel-Iran conflict entered its fifth day and US retail sales dropped more than expected, raising concerns about consumer spending,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Locals remained on the sidelines as they await the outcome of the latest meeting of the BSP, with many forecasting a rate cut, hoping to ease fears of further conflict escalation in the Middle East,” he added.

A BusinessWorld poll showed that 15 out of 16 analysts expect the Monetary Board to cut the policy rate by 25 basis points (bp) to 5.25% at Thursday’s review from the current 5.5%.

The BSP in April resumed its easing cycle with a 25-bp reduction following a surprise pause in February. It has now slashed borrowing costs by a total of 100 bps since it started cutting rates in August last year.

Iran and Israel launched new missile strikes at each other on Wednesday morning, forcing thousands of people to flee major cities, despite the call of United States President Donald J. Trump for Iran’s unconditional surrender.

“The local market pulled back as investors took a cautious stance ahead of the Federal Reserve’s policy decision,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

The Fed was set to announce its policy decision overnight at the close of its two-day meeting. It is widely expected to keep rates unchanged, but markets are waiting for fresh clues on the US central bank’s easing path.

Almost all sectoral indices closed lower on Wednesday. Financials sank by 1.7% or 40.05 points to 2,304.06; mining and oil declined by 1.54% or 155.44 points to 9,899.69; holding firms went down by 0.43% or 23.61 points to 5,415.15; services retreated by 0.23% or 5.30 points to 2,219.52; and property decreased by 0.04% or 1.05 points to 2,246.02.

Meanwhile, industrials rose by 0.44% or 40.64 points to 9,150.28.

“Manila Electric Co. was the day’s index leader, climbing 1.84% to PHP 553.50. Bloomberry Resorts Corp. was the main index laggard, falling 4.76% to PHP 5.60,” Mr. Tantiangco said.

Value turnover declined to PHP 5.28 billion on Wednesday with 2.91 billion shares traded from PHP 5.94 billion with 2.11 billion issues exchanged on Tuesday.

Advancers edged out decliners, 96 versus 95, while 52 names were unchanged.

Net foreign selling increased to PHP 254.69 million on Wednesday from PHP 15.05 million on Tuesday. — Revin Mikhael D. Ochave