Interest rate jitters spook investors
Investors stayed cautious on Monday ahead of the interest rate-setting of the Bangko Sentral ng Pilipinas (BSP), with the local bourse dipping near the 6,000 barrier.
By the closing bell, the benchmark Philippine Stock Exchange Index (PSEi) lost 1.92 percent, or 117.87 points, to 6,037.12.
The broader All Shares Index likewise shed 1.27 percent, or 46.37 points, to close at 3,617.27.
A total of 716.6 million shares worth P5.69 billion changed hands, stock exchange data showed.
Foreigners were net sellers, with foreign outflows totaling P438.19 million.
Luis Limlingan, head of sales at stock brokerage house Regina Capital Development Corp., explained that the decline was due to anxiety among investors while awaiting the BSP’s next move.
A recent Inquirer survey found that 15 out of 16 economists expect the Monetary Board to slash the policy rate by 25 basis points during its meeting on Thursday.
This will bring the benchmark rate for overnight borrowing to 5.5 percent. It will also mark the fourth rate cut under the current easing cycle.
At the same time, however, some analysts also note that it may be too early to cut rates amid the ongoing trade war in the West.
Property firms and banks saw the steepest decline on Monday as traders sold stocks of index heavyweights BDO Unibank Inc. (down 2.24 percent to P135.60), Bank of the Philippine Islands (down 1.98 percent to P128.70), Metropolitan Bank and Trust Co. (down 4.38 percent to P69.80), Ayala Land Inc. (down 2 percent to P24.50) and SM Prime Holdings Inc. (down 4.09 percent to P24.60).
