PSEi falls as market weighs Fed, SONA signals

Philippine shares retreated anew on Thursday as investors were cautious after the US Federal Reserve’s latest policy statements and as they continued to digest the potential impact of various reforms proposed in the President’s State of the Nation Address (SONA).

The Philippine Stock Exchange index (PSEi) fell by 0.74% or 47.29 points to close at 6,305.75, while the all shares index went down 0.92% or 31.99 points to 3,415.35.

“The local bourse ended lower as investors reacted to various developments following the SONA, particularly those concerning the power sector. Market sentiment was also weighed down by the latest Fed decision to leave interest rates unchanged. Overall, cautious trading prevailed as investors assessed the implications of the policy stance and domestic developments,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The local market declined following the negative cues from Wall Street amid fears that the Federal Reserve may already be lagging behind the curve. Bearishness worsened after the US struck Iran, which weakened hopes that the two would come to negotiations again,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

In his fifth SONA on Monday, President Ferdinand R. Marcos Jr. called on lawmakers to approve a bill that would remove system loss charges from consumers’ electricity bills.

Listed Manila Electric Co. (Meralco), the country’s largest private electric distribution utility, said it is willing to participate in discussions on the proposal, adding that it has kept its system loss well below the Energy Regulatory Commission’s 6.5% cap.

Meralco was the main index laggard on Thursday, plunging 13.12% to P480 each due to concerns over the impact of the proposal on its profits.

Sectoral indices ended mixed on Thursday. Mining and oil rose by 1.51% or 241.19 points to 16,208.35; financials increased by 0.24% or 4.73 points to 1,936.87; and property went up by 0.09% or 1.77 points to 1,939.49.

Meanwhile, industrials declined by 3.8% or 318.09 points to 8,037.39 holding firms dropped by 0.68% or 30.96 points to 4,511.85; and services went down by 0.09% or 3.10 points to 3,434.59.

Market breadth was negative as decliners outnumbered advancers, 113 to 65, while 54 names were unchanged.

Value turnover decreased to PHP 6.23 billion on Thursday with 997.59 million shares traded from the PHP 7.44 billion with 494.98 million issues that changed hands on Wednesday.

Net foreign buying went down to PHP 643.82 million from PHP 657.58 million in the previous session.

Meralco’s controlling shareholder Beacon Electric Asset Holdings, Inc. is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Alexandria Grace C. Magno