Shares dip as investors await key policy meetings

Local stocks losed lower on Monday as investors await fresh leads ahead of the policy meetings of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) later in the week.

The Philippine Stock Exchange index (PSEi) went down by 1.77 points or 0.02% to end at 6,124.57 on Monday, while the broader all shares index dropped by 10.94 points or 0.33% to close at 3,309.24.

“The local bourse saw a slight decline,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message, citing “a lack of a strong catalyst” while investors wait for the BSP and Fed meetings.

“Philippines shares traded quietly to start the week, as investors await the main event this week, which is the [Monetary Board’s] policy-setting meeting on Sept. 21,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

BSP Governor Eli M. Remolona, Jr. said on Thursday that a policy rate hike might be unlikely if there were no further supply shocks after the acceleration in August inflation.

Previously, the BSP extended its policy hold for three straight meetings, keeping the key policy rate at 6.25%.

A BusinessWorld poll last week showed 14 of 17 analysts expecting the Monetary Board to keep benchmark rates steady during its sixth policy meeting for the year on Thursday.

Meanwhile, Mercantile Securities Corp. Head Trader Jeff Radley C. See said in a Viber message that “investors continue to stay on the sidelines and increase their cash position until the announcement of the Federal Reserve.”

The Federal Open Market Committee will hold its policy review on Sept. 19-20, a week after the release of the US consumer price index (CPI) report.

The Federal Reserve raised borrowing costs by 25 basis points (bps) in July, bringing the US central bank’s target to the range of 5.25% to 5.5%, Reuters reported.

It has hiked rates by a total of 525 bps since it began its tightening cycle in March last year.

Back home, sectoral indices were split on Monday. Mining and oil went down by 89.53 points or 0.85% to 10,396.08; financials dropped by 13.12 points or 0.73% to 1,773.81; and services lost 4.22 points or 0.28% to 1,490.34.

Meanwhile, property gained 10.18 points or 0.4% to 2,512.77; holding firms rose by 6.01 points or 0.1% to 5,865.33; and industrials increased by 2.51 points or 0.02% to 8,792.39.

Value turnover declined to PHP 3.64 billion on Monday with 549.70 million shares changing hands from the PHP 9.07 billion with 1.55 billion issues seen on Friday.

Decliners outnumbered advances, 121 versus 58, while 52 names closed unchanged.

Net foreign selling dropped to PHP 419.26 million on Monday from PHP 2.48 billion on Friday. — Sheldeen Joy Talavera with Reuters