Stock market recovers slightly; Diokno causes negative sentiment on peso

ILOILO City – The Philippine Stock Exchange index (PSEi) remained relatively tranquil last week, as it bounced up from the 7,600 point level to end near 7,800.

Despite the substantial improvement, technical analyst and stock broker Hernan Segovia said that the market has yet to fully recover and transition into a bull market.

“We’re waiting for the final showdown this March. If we can tackle 8,000 at the end of March, we might see some good news moving forward,” Segovia said.

The market was abuzz this past week with former Budget secretary Benjamin Diokno appointment to the Banko Sentral ng Pilipinas (BSP). According to Segovia, Diokno’s appointment as governor of the BSP has temporarily weakened the peso, which in turn may adversely affect the stock market.

“The surprise news was about Diokno being appointed to the BSP governorship,” Segovia said. “So there’s a little bit of negative sentiment, which moved the peso weaker against the dollar. From 51.70 level to 52.25.”

According to Segovia, most of negative sentiment about Diokno was due to his position of cutting interest rates to address any weakness in the peso. Despite this news, however, Segovia also believes that Diokno’s new role will not harm the market as badly as many people think, and that the peso-to-dollar exchange rate will still recover back to P50 levels.

“Psychologically wise, I think secretary Diokno will surprise the market, especially the movement of the peso. I liken him to a President Donald Trump who many economists are feared that a Trump Presidency will put the US economy into doldrums, but the reverse happened,” Segovia said. “So I’m still in the 50 peso level technically wise despite Diokno.”/PN


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