PSEi declines further on vaccine concerns, Fed

LOCAL SHARES declined further on Thursday on the delay in the Philippines’ inoculation program and as the US central bank said the world’s largest economy may need more stimulus as the pandemic continues.

The benchmark Philippine Stock Exchange (PSEi) decreased 116.79 points or 1.67% to close at 6,849.64 on Thursday, while the broader all shares index dropped by 43.05 points or 1.02% to end at 4,170.48.

“Philippines shares fell once again after minutes from the Federal Reserve’s January meeting showed officials were skeptical about the US economy improving enough to warrant removing monetary stimulus any time soon. In addition, investors remained cautious as volcanic activity in Taal restricted the movement in certain towns in Batangas,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Facing a still-scarred economy that may need an extended time to recover fully, Fed officials last month debated how to lay the groundwork for the public to accept coming higher inflation, and also the need to “stay vigilant” for signs of stress in buoyant asset markets, according to minutes of the US central bank’s Jan. 26-27 policy meeting, Reuters reported.

AB Capital Securities, Inc. Junior Equity Analyst Lance Soledad, meanwhile, blamed the country’s pending vaccine rollout for the market’s drop on Thursday.

“We continued to see negative sentiment persist in the market as the country will not be able to gain access to vaccines until an indemnification program is passed into law,” Mr. Soledad said in a Viber message.

The country’s coronavirus disease 2019 (COVID-19) inoculation program is running behind schedule as officials have yet to work on an indemnification program.

The program will give pharmaceutical companies manufacturing and distributing the COVID-19 vaccines immunity from liability, should the vaccine cause negative side effects.

Majority of sectoral indices closed lower except for mining and oil, which gained 127.07 points or 1.39% to finish at 9,214.27, and financials, which rose by 18.51 points or 1.28% to 1,461.88.

Meanwhile, property decreased by 89.65 points or 2.53% to 3,443.97; holding firms went down by 175.97 points or 2.44% to 7,019.22; industrials dropped 96.7 points or 1.06% to close at 8,954.62; and services declined by 12.6 points or 0.84% to 1,476.97.

Value turnover dropped to P8.9 billion on Thursday with 16.62 billion shares switching hands from the P19.35 billion with 17.23 billion issues the previous day.

Decliners outnumbered advancers, 113 versus 109, while 39 names closed unchanged.

Net foreign selling ballooned to P1.25 billion yesterday from the P941.66 million recorded on Wednesday.

“We still expect the index to range trade within 6,800-7,160 for now,” Mr. Soledad added. — Keren Concepcion G. Valmonte