PHILIPPINE SHARES dropped on Monday amid lingering global banking sector worries following UBS Group’s acquisition of Credit Suisse.
The benchmark Philippine Stock Exchange index (PSEi) declined by 18.70 points or 0.28% to end at 6,451.02 on Monday, while the broader all shares index went down by 7.61 points or 0.22% to close at 3,456.66.
“This Monday, the local bourse lost 18.70 points or 0.29% to 6,451.02 amid the ongoing issues in the banking sector,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
“Asian markets, including the local market, were reacting negatively to UBS’ acquisition of Credit Suisse as investors think that the crisis may be far from over… This added to the fears toward the banking sector,” Ms. Alviar said.
First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message that the market was sharply lower early in the session, but recovered in the afternoon, as worries over the global financial sector caused uncertainty about the next moves of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).
Mercantile Securities Corp. Head Trader Jeff Radley C. See likewise said in a Viber message that shares recovered before the market close as investors started buying shares amid easing uncertainty over the Credit Suisse deal.
Asian stocks steadied on Monday in relief at a weekend rescue deal for Credit Suisse and a concerted effort from central banks to shore up the mood, Reuters reported.
Beaten-down bank shares bounced 1% in Tokyo, while the broader Nikkei fell 0.2%. Financials in Australia fell 0.8% and the ASX 200 fell 0.5%.
In a little over a week, the fallout from the collapse of Silicon Valley Bank — which has roiled confidence in the banking system — has brought a globally systemic lender to its knees. Over the weekend, UBS said it will buy Credit Suisse for 3 billion francs (USD 3.2 billion) and assume up to USD 5.4 billion in losses, in a shotgun merger engineered by Swiss authorities.
Concerns over global banks have caused investors to bet that the Fed would opt for a smaller rate hike in its March 21-22 meeting to not add to stress in the financial sector. Analysts have said the BSP could mirror the US central bank’s move in its own review on March 23.
Most sectoral indices closed lower on Monday. Financials dropped by 29.56 points or 1.64% to 1,764.78; services declined by 5.89 points or 0.37% to 1,561.49; holding firms fell by 9.6 points or 0.15% to 6,301.10; and industrials went down by 4.04 points or 0.04% to 9,349.91.
Meanwhile, property gained 23.31 points or 0.86% to end at 2,731.48; and mining and oil went up by 1.93 points or 0.01% to 10,513.24.
Value turnover dropped to PHP 5.63 billion on Monday with 714.81 million shares changing hands from the PHP 8.5 billion with 1.02 billion issues traded on Friday.
Decliners outnumbered advancers, 99 versus 73, while 55 names closed unchanged.
Net foreign selling rose to PHP 89.62 million on Monday from PHP 14.81 million on Friday. — A.H. Halili with Reuters