Stocks, money market close 2022 with year-to-date declines

Philippine financial markets were mixed on the last trading day of the year, but both the local stock market and the foreign exchange markets posted year-to-date declines.

The Philippine Stock Exchange Index (PSEi) shed 0.15 points or 0.002% to close at 6,566.39. The index has lost 768.17 points or 10.47% from 7,334.56 on December 29, 2021, the last trading day of the previous year.

The broader All Shares index declined by 12.71 points or 0.37% to 3,462.04, also lower than the close of 3,883.38 on the final trading of 2021.

“Philippine shares were able to remain flat despite the broad selloff in the US, as recession fears weighed on investor sentiment in a losing week, month, and year,” Luis Limlingan, head of sales at Regina Capital Development Corp., said in a mobile message.

“With 2022 in the books, investors started the last chance for window dressing,” he added.

More than 1.125 billion shares, valued at P6.165 billion, changed hands during the session. Advancers led decliners, 120 to 68, and 49 issues were unchanged.

The Philippine peso posted gains against its US counterpart on Thursday, appreciating by 44.5 centavos to P55.755:$1 versus Wednesday’s finish of P56.2:$1.

Thursday’s appreciation came during the last trading of the year, with Friday, December 30, declared by Malacañang as a regular holiday in commemoration of Rizal Day.

“The long Christmas holiday weekend and the following long New Year holiday weekend may still lead to accelerated holiday-related spending, though by a lesser extent shortly before the New Year celebrations,” Michael Ricafort, chief economist at the Rizal Commercial Banking Corp. (RCBC), said in a separate mobile message.

Year-to-date, however, the peso has depreciated by P4.756 or 9.3% from the close of P50.999:$1 recorded at the last trading day of 2021. It also hit a new all-time low of P59:$1 several times during the year.

“Still relatively weaker peso in recent months could still increase the possibility of further local policy rate hike/s and possibly matching future Fed rate hikes if inflation remains high,” Ricafort said.

Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla earlier said the Monetary Board is set to continue hiking key policy rates by at least 25 basis points in its first two meetings in 2023.

Medalla also said that the “worst is over for the strong dollar,” with inflation expected to start decelerating by January 2023.

Moving forward, Ricafort said the movement of the Philippine peso versus its US counterpart would track the regional trend, in line with the monetary policy tightening activities of the US Federal Reserve.

“Trend for 2023 also a function of global/regional trend of the US dollar, at times through in a positive manner lately with the healthy downward correction in the US dollar vs. major global currencies,” he said, noting the lower-than-expected inflation in the US, possible reducing aggressiveness in the coming months. — BM, GMA Integrated News