MANILA – Both the Philippine peso and stocks index ended the week on a positive note due to consolidation after the weakness mainly brought about by anxieties on the coronavirus disease 2019 (Covid-19) developments.
The local currency improved against the US dollar and even climbed to 50.97 from its 51.1 close a day ago.
It opened the day at 51.15, better than its 51.3 start in the previous session.
It traded between 51.24 and 50.75, resulting in an average of 50.947.
BDO chief strategist Jonathan Ravelas said the peso improved by 0.12 percent against the US currency week-on-week on profit-taking after it tested the 51.85 levels.
“Fears slowly creeped in after the WHO (World Health Organization) declared it a pandemic and the rising Covid-19 cases in the country caused the peso to test the 51.85 levels after a lockdown was placed all over the country,” he said.
Ravelas expects the local currency to “move sideways to up.”
“Only a sustained break above the 51.30 will signal another attempt towards 51.50/51.85 levels,” he added.
After two days of decline, with a two-day trading suspension in between, the Philippine Stock Exchange index (PSEi) gained 3.36 percent, or 155.34 points, to 4,778.76 points Friday.
All the other gauges mirrored the main index, with the All Shares up by 2.33 percent, or 67.07 points, to 2,948.65 points.
Financials registered the highest increase with 6.67 percent and was followed by the Holding Firms, 3.75 percent; Property, 2.48 percent; Services, 1.07 percent; Industrial, 0.79 percent; and Mining and Oil, 0.66 percent.
Volume totaled to 659.466 million shares amounting to PHP6.66 billion.
Gainers surpassed losers at 117 to 85, while 30 shares were unchanged.
Ravelas said this week’s close “highlights the bears are in control.”
Bear territory happens when stock values fall at least 20 percent from recent high and stay where for some time.
Ravelas said the main index fell 17.52 percent week-on-week for the fourth consecutive week after “investors cashed in their portfolios and held cash as confidence waned after rising Covid-19 cases in the country and a lockdown was effected all over the land.”
“With the swift break below the 5,000 levels like a hot knife through butter, hints that there are still some risks to the downside towards the 3,800-4,000 levels in the near-term,” he said.
Ravelas expects some bargain hunting given the steep drop this week.
Regina Capital Managing Director Luis Limlingan said the PSEi’s close Friday was expected after “investors bought shares in the index which has not traded in these levels for around eight years.”
He attributed this development to general improvement of the US dollar due to strong demand as the coronavirus pandemic is threatening to cripple economic activity, prompting investors to sell assets to keep their money in cash. (PNA)