PSEi, peso weaken amid oil, MidEast risks

The Philippine Stock Exchange index (PSEi) fell 12.12 points, or 0.21 percent, to 5,843.79 Monday, while the peso weakened 3.1 centavos, or 0.05 percent, to P62.78 per US dollar as elevated oil prices, local Treasury yields and renewed Middle East tensions kept investors cautious.

Trading subdued

Trading remained subdued, with net value turnover at P5.61 billion and foreign investors posting estimated net outflows of P860.88 million. Holding Firms gained 1.76 percent, the only sector to advance, while Industrial fell 1.50 percent, Mining & Oil 1.42 percent, Services 0.86 percent, Property 0.56 percent and Financials 0.06 percent.

Ayala Corp. rose 5.13 percent to P533, while Semirara Mining and Power Corp. dropped 7.02 percent to P16.70.

Brent crude traded around $103.06 a barrel and WTI at $99.41, after both benchmarks declined Friday. Oil remained elevated amid continued disruptions involving the Middle East, although recovering Saudi exports and alternative shipping routes eased some supply concerns.

The peso opened at P62.75 and traded between P62.74 and P62.84. The BAP weighted average rose to P62.799 from P62.67 Friday, while dollar turnover fell to about $1.044 billion from $1.508 billion.

Local currency under pressure

The currency remained under pressure from elevated oil prices, which increased the Philippines’ import bill, as well as a relatively firm US dollar following the Federal Reserve’s recent 25-basis-point rate increase. The Fed has also signaled that another hike could occur before year-end.

Meanwhile, renewed attacks and tensions involving Saudi Arabia, Iran and the United States kept geopolitical risks elevated.

However, lower crude prices and signs of recovering Saudi oil exports provided some relief to the peso and limited the day’s decline.