PSE Index Plummets On Inflation Worries

The Philippine Stock Exchange (PSE) index experienced a significant decline Thursday, plummeting to 6,178.60 points, representing a substantial drop of 119.60 points, or 1.90 percent, due to inflation concerns.

The Philippine Stock Exchange (PSE) Index, October 5, 2023

The August inflation rate reached 6.1 percent, bringing the year-to-date rate to 6.6 percent, which is concerning for the economy.

Investors reacted by selling off their positions in response to the inflation data, which signals a potential interest rate hike by the Bangko Sentral (Central Bank) to curb rising prices of goods and commodities.

This anticipated increase in interest rates could lead to higher prices in the future, resulting in significant selling pressure.

Notably, the Top 10 most active stocks saw pronounced declines of over 1.5 percent, marking the first time this has happened in at least three years.

The property sector experienced a substantial decline of 2.45 percent, with analysts attributing this to decreased purchases of condominiums due to prevailing economic hardships.

Share prices of companies catering to the consumer market are also expected to be impacted. SM Prime and Ayala Land both posted losses, with SM Prime dropping by P1.35 to P29.60 and Ayala Land decreasing by 10 centavos to P28.60.

Other sectors also saw losses, with industrials declining by 1.73 percent, financials by 1.60 percent, holding firms by 1.57 percent, services by 1.56 percent, and mining and oil by 1.71 percent.

Market bellwether SM Investments lost 1.51 percent, closing at P814, down by P12.50. Trading volume reached P469 million, making it the second most active stock after BDO Unibank, which had trades of P551 million and fell by P1.30 to P138.70.

Foreign buying amounted to P2.9 billion, while foreign selling reached P3.38 billion, resulting in a net foreign selling of P475 million. The total value turnover was P5.43 billion, with 67 gainers, 119 losers, and 45 shares remaining unchanged.

Most of the shares that rose belonged to second-line companies, including PH Resorts, up by 9 centavos to P0.80, Axelum Resources, up by 1 centavo to P2.08, Philex Mining, up by 7 centavos to P2.67, Megawide, up by 3 centavos to P3.28, and Bloomberry, up by 6 centavos to P10.14. Union Bank, however, gained P1.35, closing at P64.40.

Among the losers were Universal Robina, down by P5 to P115, a 4.17 percent decline, Bank of the Philippine Islands was down by P3 to P107, ICTSI, down by P3.80 to P203), Jollibee Foods, down by P3.20 to P220, PLDT, down by P25 to P1,170, Converge, down by 4 centavos to P9.35, and Globe Telecom, down by P40 to P1,780.

Rounding out the stocks that dropped were Aboitiz Power, down by 5 centavos to P34.95, Aboitiz Equity, down by 45 centavos to P49.30, Metrobank, down by 90 centavos to P52.60, GT Capital, down by P20 to P570, PNB, down by 14 centavos to P18.20, Meralco, down by P3.80 to P366, Semirara Mining, down by 95 centavos to P33.50, and Emperador down by 75 centavos to P77.80.

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