Stocks, peso rise as US, China execs hold trade talks

Philippine stocks and the peso ended the week on positive note even as investors were all eyes on the resumption of the US-China trade discussions this week.

The Philippine Stock Exchange index (PSEi) improved for the second day in a row after it posted a 0.56 percent, or 44.53 points, uptick to 7,920.93 points.

All Shares gained 0.43 percent, or 20.73 points, to 4,864.17 points.

Most of the sectors tracked the main index with Services posting the biggest jump at 1.36 percent. It was followed by the Property, 1.18 percent; Industrial, 0.53 percent; Financials, 0.45 percent; and Mining and Oil, 0.19 percent.

Holding Firms, meanwhile, fell 0.13 percent.

Volume reached 1.70 billion shares amounting to PHP6.7 billion.

Losers surpassed gainers at 112 to 97, while 35 shares were unchanged.

Luis Limlingan, Regina Capital Managing Director, said PSEi ended the quarter up more than six percent “as part of window dressing and while investors watched developments between US and China.”

Citing reports, Limlingan said US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are currently in Beijing, China for the trade meeting, while China Vice Premier Liu He is scheduled to fly to the US next month.

He also attributed the positive close of the PSEi to recovery of US markets.

“This overshadow the weakness from a weaker US macro data and another huge depreciation in the Turkish Lira,” he said.

The Lira is now on a see-saw as a result of the faltering Turkish economy due to political and economic issues being faced by the Western Asian country.

Similarly, the peso finished the week better at 52.5 from 52.75 Thursday.

A trader pointed this to the performance of stock markets not just in the Philippines but in several other countries.

The trader said hopes are high for the eventual deal from the meetings between US and China officials which, in turn, will also benefit other countries.

For the day, the peso opened at 52.7, almost unchanged from the 52.71 a day ago.

It traded between 52.74 and 52.46, resulting in an average of 52.629.

Volume reached USD901.77 million, lower than the USD929.72 million a day ago.

The peso is seen to trade between 52.40 and 52.70 to a greenback next week. The Philippines and its ASEAN-neighbors-- Malaysia and Indonesia-- have agreed to form a tri-partite technical working group to address the smuggling and dumping of palm oil into the country to the detriment of local coconut farmers.

Department of Agriculture (DA) Secretary Emmanuel "Manny" Piñol said the agreement was reached on Thursday following a call by Malaysian and Indonesian government representatives on him.

The DA earlier recommended a temporary ban on palm oil importation from Indonesia and Malaysia, citing figures which indicate dumping of the commodity which led to the collapse of local coconut prices.

Under the rules of the World Trade Organization (WTO), member-countries could initiate measures to safeguard its farmers affected by the dumping of excess commodities from other countries.

Importation data gathered by the DA showed that exports of palm oil to the Philippines by both Indonesia and Malaysia have increased by 100 percent over the last three years.

Since palm oil is cheaper than coconut oil, the former's increase in the commodity exports was cited one of the reasons behind the collapse of copra prices.

During yesterday's meeting, Piñol said, it was agreed that the technical working group will draft recommendations on the rationalization of palm oil exports to the Philippines.

Piñol said he proposed keeping palm oil exports by Malaysia and Indonesia at levels which would not hurt the country's coconut and palm oil industry.

He also called on Malaysia and Indonesia to check on reports on the alleged smuggling of crude and refined palm oil to the Philippines.

Piñol also suggested to the two countries to open up their markets to Philippine products, especially coconut-based products, to correct the trade imbalance.

The technical working group is expected to be organized next week.