Peso, stocks slump as Trump victory rattles markets
The Philippine peso slipped near its all-time low while stocks almost surrendered a hard-fought wall as the highly divisive Donald Trump returned to the White House to reclaim the US presidency.
The local currency finished Thursday’s trading at 58.73 against the greenback, weaker than its previous closing of 58.661.
The peso’s worst showing yesterday stood at 58.805, few centavos away from the record-low 59. Funds valued at $1.6 billion switched hands during the trading session.
Noel Reyes, chief investment officer for Trust and Asset Management Group at Security Bank Corp., said such volatility might send the peso testing the 59-mark until next week, although he believed the level would provide a “strong resistance” as markets price in the second Trump presidency.
It also did not help that the country’s economic growth slowed to 5.2 percent in the third quarter, which Reyes said necessitated the need for more rate cut easing from the Bangko Sentral ng Pilipinas.
”And with Trump finally winning, his expansionary policies and tariff plans will be inflationary and will increase their deficit, necessitating prolonged high … interest rates [in the US],” he added.
Over at the stock market, shares slipped by more than 2 percent and nearly gave up the 7,000 level that investors held on to for almost two months.
By the closing bell, the benchmark Philippine Stock Exchange Index (PSEi) fell by 2.11 percent, or 150.98 points, to 7,014.44.
Likewise, the broader All Shares Index shed 1.97 percent, or 78.33 points, to close at 3,891.64.
Value turnover was at P9.72 billion for 1.11 billion shares, stock exchange data showed.
The stock barometer briefly touched the 6,900 level during the day—going as low as 6,923.99—before clawing its way back to 7,000, albeit with difficulties.
While Washington is thousands of kilometers away from Manila, Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., pointed out the local economy “faces renewed macroeconomic and geopolitical challenges arising from Trump’s trade and economic policies.”
With the strong performance at Wall Street and the continued appreciation of the US dollar, he said the PSEi might fall further to 6,500 to 6,800—or levels it had not touched since August and September.
Nearly all subsectors were in the red, with investors dumping property and mining stocks the most.
Wendy Estacio-Cruz, research head at Unicapital Securities Inc., told the Inquirer that traders would likely shed property and holding companies due to the “direct and indirect” impact of Trump’s victory on interest rates and business process outsourcing (BPO) demand.
“Overall, a Trump presidency could bring economic challenges for the Philippines, especially in trade, investment and remittances,” Cruz said in a text message.
“Additionally, his ‘America First’ policies and corporate tax cuts could reduce demand for labor outsourcing, impacting the BPO industry,” she added.
Losers overpowered gainers, 167 to 46, while 40 companies closed unchanged, stock exchange data showed.
