PSE Index Down Anew On U.S. Debt

The Philippine Stock Exchange (PSE) index today declined anew in subdued trade on a fallout from the drop in the Dow Jones as a result of investor concerns on US debt, which has now reached its limit of $31.4 trillion.

Photo Insert: The Philippine Stock Exchange (PSE) Index, January 20, 2023. Treasury Secretary Janet Yellen warned that longer legislation on the debt ceiling would cause "irreparable harm to the US economy, livelihood of all Americans, and global financial stability."

While still at its 7,000-point milestone level, the index consequently closed a tad lower at 7,056.62 points, down by 5.39 points or 0.08 percent as three of the sub-indices posted gains.

Market bellwether SM Investments was the most active stock with P345 million as it closed P19.50 higher to a new peak of P950 as investors continued their bets on the economic turnaround in the country with the revenge spending post-pandemic that it even hit a high of P958.50 after opening at its low of P930.

Foreign investors have zeroed in on SM due to its subsidiaries tied to economic growth such as malls and property.

Meralco was the second most active as it posted a loss of P9 to P282 on trades of P329 million while GT Capital went up by 2.23 percent to P495.80, up by P10.80 on trades of P304 million on its looming bet on increasing its stake in Metro Pacific.

Jollibee Foods and Ayala Corp also posted declines, respectively by P3 to P245 and P1 to P745, the latter going up to as high as P756 and as low as P740.

The market's albatross remained the fear over the US economy which is now mired in trouble over its debt hitting the ceiling of P31.4 trillion, which would require Congress' approval of increasing the limit.

Analysts are anticipating a longer resolution as the Republicans, who now control the majority in Congress, bat for spending cuts that would undermine the Democrats' push for increased spending through higher debts.

Treasury Secretary Janet Yellen has already warned of a costly result of longer legislation work for higher debts that, according to her, will cause "irreparable harm to the US economy, livelihood of all Americans, and global financial stability."

Concerns have been raised that the US economy is going into recession and, with US debt having reached its limit, will mean future problems as well for emerging markets like the Philippines.

Financials lost 0.44 percent, industrials, 0.55 percent, and services went down by 0.85 percent while holding firms rose by 0.36 percent, mining and oil by 1.32 percent, and property by 0.83 percent as Ayala Land gained 65 centavos to P32.65 and SM Prime was up by 5 centavos to P38.35.

ICTSI declined by P2 to P216, PLDT by P25 to P1,460, Globe Telecom by P76 to P2,080, Converge by 18 centavos to P18.84, and Figaro by 2 centavos to P0.90. Among the gainers were Union Bank, up by P1.50 to P92, Emperador, up 20 centavos to P20.95, BDO Unibank, up 30 centavos to P123, and Universal Robina up by P3 to P145.

Value turnover amounted to P6.86 billion, still up the daily average of P6 billion with 97 gainers, 86 losers, and 59 shares unchanged.

There has been optimism over the local market but Wall Street has served as a dampener to perking up local interest even in light of the rise in the number of shares that were being bought by investors.

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