The Philippine Stock Exchange index (PSEi) plunged despite some end-of-semester window-dressing as investors worry over rising inflation and interest rates.
The main index fell 147.76 points or 2.34 percent to close at 6,155.43 with the Services sector leading the decline although the Industrial and Mining and Oil counters advanced. Volume improved to 881 million shares worth P6.41 billion, boosted by the listing of Balai ni Fruitas.
Balai’s share price dropped 7.14 percent on its debut to end at P0.65 per share from the initial public offering price of P0.70 each.
“Philippine shares ended the last trading session of the semester in the red, as the street continued to search for the bottom of a vicious market sell-off,” said Regina Capital Development Corporation Managing Director Luis Limlingan.
He noted that, “Concerns over a slowing economy and aggressive rate hikes consumed much of the first half of 2022, and fears of a recession are rising.” “Back home, attention has shifted to the inauguration of the 17th Philippine President,” Limlingan said.
Philstocks Financial Research and Engagement Officer Claire Alviar said “The market declined amid a lack of positive catalyst at home, coupled with a higher inflation rate expectation this June.”
She added that, “The BSP projects the inflation rate this June to settle within 5.7 to 6.5 percent, which is higher than May's 5.4 percent and the government's target of 2-4 percent. This weighed heavily on the sentiment as consumers' purchasing power is anticipated to weaken.“
“Moreover, the possibility that the BSP may increase the interest rate higher than the planned 25 bps weighed on sentiment as it may slow down the economic growth,” Alviar said.