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Philippines: Higher inflation pulls down share prices
MANILA, Philippines — Share prices continued to slide yesterday as higher-than-expected inflation results as well as the on-going US-China trade talks pulled down the market.
The benchmark Philippine Stock Exchange Index(PSEi) dropped by 0.32 percent or 25.02 points to 7,790.91, while the broader all shares index closed 0.36 percent or 17.18 points lower to 4,640.63.
“With trade talks ongoing and the November inflation coming in a little over expected, local shares slid this trading session,”Regina Capital Development Corp. business development head Luis Limlingan said.
The Philippine Statistics Authority(PSA) reported that inflation grew 1.3 percent in November from last month’s 0.8 percent and the six percent posted a year ago.
The increase was driven by higher prices of alcohol and tobacco as well as higher utility costs and fuel prices.
Year-to-date inflation registered at 2.5 percent, still within the government’s target of two to four percent.
Apart from the higher-than-expected inflation results, Limlingan said the US- China trade talks have also dampened yesterday’s trading.
“The US and China are closer to agreeing on the amount of tariffs to be rolled back in a phase-one trade deal even amid tension over Hong Kong and Xinjiang, people familiar said. President Trump’s comments downplaying the urgency of a deal shouldn’t be understood to mean the talks were stalling,” Limlingan said.
“US negotiators expect a phase one deal to be completed before American tariffs rise on Dec. 15,” he said.
All sectoral indices, except holding firms, registered declines, with the services index posting the largest drop at 2.0 percent or 30.72 points to close at 1,503.
In contrast, the holding firms index climbed by 0.25 percent or 19.07 points to 7,715.23.
A total of 81,811 trades valued at P6.5 billion were made while volume turnover stood at 514 million.
Declines outnumbered advances 117 to 68 while 54 remained unchanged.
Source: https://www.philstar.com/business/2019/12/06/1974572/higher-inflation-pulls-down-share-prices#mZFTqJ8XZJoPOoW1.99