Shares dip after IMF growth cut, Fed stance


Philippine shares closed in the red on Friday, posting corrections after the market digested the International Monetary Fund’s (IMF) growth forecast of the country and after the US central bank shifted its policy stance, analysts said.

The Philippine Stock Exchange index (PSEi) declined by 36.54 points or 0.53% to close at 6,851.38 on Friday, while the all shares index went down by 18.06 points or 0.43% to 4,166.9.

“The market ended the week in the red as the market saw a pullback after rallying for three straight weeks,” AB Capital Securities, Inc. Junior Equity Analyst Lance U. Soledad said in a Viber message.

“Catalysts for this week’s decline were the Fed’s hawkish statement, and the IMF’s downgrade of the country’s growth forecast,” Mr. Soledad added.

COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said the market corrected after being in “overbought levels” and “a stretch from short-term support areas.”

“The market proceeded to correct today after seeing some tenderness from the US. Recent reports from the US regarding the openness to raising rates in 2023 jarred some sentiment which had some ripple effects to other markets,” Mr. Barredo said in a separate Viber message.

The IMF cut the Philippine economy’s growth forecast this year to 5.4% from 6.9% after another surge of coronavirus disease 2019 (COVID-19) infections triggered the implementation of tight quarantine measures beginning late March, hampering economic recovery.

Overseas, Fed officials moved their first projected rate increases to 2023 from 2024. Majority or 13 out of 18 policymakers forecast a “liftoff” in borrowing costs that year, and 11 are expecting two quarter-percentage-point rate increases, Reuters reported.

Back home, most sectoral indices closed the week in the red except for services,

which rose by 15.17 points or 0.98% to 1,558.65, and industrials, which gained 79.81 points or 0.86% to end at 9,364.03.

Meanwhile, property shed 67.41 points or two percent to 3,293.3; financials inched down by 16.01 points or 1.06% to 1,491.4; mining and oil lost 48.12 points or 0.51% to finish at 9,311.04; and holding firms declined by 13.4 points or 0.19% to 6,936.33.

Value turnover decreased to P9.8 billion with 2.25 billion shares switching hands on Friday, from the P14.18 billion with 3.29 billion issues traded on Thursday.

Decliners outnumbered advancers, 106 against 98, while 46 names closed unchanged.

Net foreign selling declined to P856.75 million on Friday from the P5.20 billion logged on Thursday.

“For next week, investors will likely monitor the BSP’s (Bangko Sentral ng Pilipinas) policy statement. So far, Bloomberg estimates show expectations of an unchanged policy rate,” AB Capital Securities’ Mr. Soledad said.

COL Financial Group’s Mr. Barredo said the index’s current support level nears 6,750 to 6,630. — Keren Concepcion G. Valmonte