PSEi slips anew; banks’ share prices drop on margin pressure concerns
The local stock barometer slipped for a second straight session on Friday as investors pocketed gains from big banks in anticipation of margin pressures arising from the decline in interest rates.
The main-share Philippine Stock Exchange Index (PSEi) fell by 30.98 points or 0.48 percent to close at 6,413.18.
“Market remains flat and in consolidation as not much news can be seen in the horizon. [There are] not much real incentives for now for investors,” said Astro del Castillo, managing director at fund management firm First Grade Finance.
“The SONA (State of the Nation Address of President Marcos) could hopefully give energy to the market,” he said. The index was weighed down most by property giant Ayala Land, which fell by 2.82 percent.
The country’s top three banks also slumped. Bank of the Philippine Islands fell by 1.76 percent and BDO Unibank, by 1.1 percent. Metrobank shed 0.2 percent.
April Lee-Tan, chief strategist at COL Financial, noted that large-cap banks may be hurt by lower interest rates.
Because of their large base of low-cost deposits, Lee-Tan explained that the slowdown in interest rates would curb the net interest margins of the big banking players.
“Cost of deposits doesn’t go down as much, but corporate loan rates will go down,” she said.
On the other hand, she said smaller banks with a big base of time deposits would benefit from the decline in funding costs.
Lee-Tan also noted that prices of big banks had climbed sharply in the past few years, making those rich valuations now attractive for profit-taking.
Food manufacturer Century Pacific Food also lost 1.06 percent.
Outside the PSEi, DigiPlus Interactive remained the day’s most actively traded company. Its shares fell by 0.92 percent— pulling back from two days of strong rebound—even as the leading online gaming firm announced on Friday plans to invest in South Africa.
On the other hand, Puregold Price Club bucked the PSEi’s downturn, advancing by 2.24 percent.
Second-liners Citicore Renewable Energy Corp. and Philippine National Bank rose by 1.45 percent and 3.63 percent, respectively.
Value turnover amounted to P6.95 billion. There were 112 decliners that beat 93 advancers, while 48 companies were unchanged.
Despite the PSEi’s decline, foreigners were net buyers to the tune of P113.74 million.
The financial counter fell by 0.7 percent while the property and mining/oil counters both shed more than 1 percent. The industrial counter dipped by 0.33 percent.
The holding firm subindex ended marginally higher (+0.07 percent).
Despite the doldrums seen in the last two days, however, the gains eked out earlier in the week allowed the PSEi to still end the week as a net advancer. The index added 109.46 points or 1.74 percent this week
