Stocks rise, peso tumbles on oil price surge

By Jenniffer

B. Austria and Julito G.

Rada

LOCAL stocks rebounded Monday, but the Philippine peso tumbled to a two-month low as global crude prices continued to rise.

The Philippine Stock Exchange index, the 30-company benchmark, rose 56.94 points, or 0.88 percent, to close at 6,507.78, while the broader allshares index rose 26.31 points to settle at 3,473.92.

Philstocks Financial Inc. research analyst Claire Alviar said despite the market’s advance, value turnover remained thin as investors remained cautious over upward risks to inflation rate.

PSEi August 7, 2023

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Alviar said investors were also waiting for the release of second-quarter gross domestic product data later this week.

The peso shed P0.28 to close at 56.02 against the greenback Monday from 55.74 on Friday. It was the local currency’s lowest level since it finished at 56.05 on June 9, 2023. Total volume turnover reached $973.75 million, down from $1.138 billion previously.

Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said in an emailed response to Manila Standard the local currency’s weakness could be attributed to the surging global crude oil prices that posted new 3.5-month highs, thereby leading to some pickup in local fuel pump prices and overall inflation. Ricafort said this led to “higher import bill and wider trade deficit for the country.”

“The peso also weakened after recent signals on being careful of not hiking local policy rates too much to avoid slowing economic/GDP growth, as well as some net foreign selling in the local stock market recently,” Ricafort said.

He said the markets were still anticipating the seasonal increase in importation activities in the third quarter after the tail-end of the seasonal increase in OFW remittances and conversion to pesos for tuition payments and other related expenses in preparation for the start of the new school year.

Economists from First Metro Investment Corp. and University of Asia & the Pacific said in their joint report titled The Market Call for the month of July that a peso depreciation was expected in the third quarter.

“With the economy’s large trade deficits still in place and the BSP’s pause compared to Fed’s 25 bps policy rate increase, and the recent [mid-July] recovery

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Siemens Energy logs record loss on wind turbine tech trouble

FRANKFURT, Germany—Siemens

Energy reported a record third-quarter net loss Monday after taking a 1.6-billion euro ($1.7 billion) hit to fix technical problems with its onshore wind turbines.

The group had warned in June that quality issues at its troubled Siemens Gamesa wind unit were worse than previously thought, sending its share plunging more than 30 percent.

After initially estimating the repair cost at more than a billion euros, Siemens Energy announced a 1.6-billion-euro charge to resolve the issues affecting “certain rotor blades and main bearings in the 4.X and 5.X platforms”. The charge weighed heavily on the company’s overall performance in its fiscal third quarter, which slumped to a net loss of 2.9 billion euros compared with a loss of 564 million euros over the same period a year earlier.

The result was also dragged lower by extra charges of 600 million euros in its offshore wind business, which has been hit by “higher product costs” and difficulties ramping up capacity.

Siemens Energy said it was “additionally burdened” by a 700-millioneuro write-down of deferred tax assets during the quarter.

Looking ahead, the group now expects a significantly larger full-year net loss of 4.5 billion euros, following a 712-million-euro loss the previous year. AFP

RETAIL STATION. Gas station signboards display prices in Bethesda, Maryland on August 6, 2023. The American Automobile Association’s average price for a gallon of regular gasoline is $3.829, up from $3.331 on January 2, 2023. This increase could have an impact on the latest Consumer Price Index, scheduled for release on August 10. AFP

Indonesia economy grows faster than expected in Q2

JAKARTA, Indonesia—Indonesia’s economic growth accelerated faster than expected in the second quarter of the year, official data showed Monday, the strongest rate in three quarters despite lagging exports.

Southeast Asia’s largest economy grew 5.17 percent on-year between April and June, according to Statistics Indonesia, beating analysts’ expectations.

The continued growth was driven by household spending, foreign and domestic investment and increased government spending, Statistics Indonesia official Edy Mahmud told reporters.

“During the second quarter of 2023, Indonesia’s economic performance was supported by the increase of peo- ple’s mobility and religious holidays that drive up people’s consumption and production activities,” Mahmud said.

He emphasized the resilience of Indonesia’s economy emerging from the Covid-19 pandemic despite exports contracting for the first time since the last quarter of 2020, owing in part to declining palm oil prices. Exports fell 2.75 percent compared to the same quarter last year, figures showed.

Indonesia posted growth last year of 5.3 percent—the highest for nine years—on the back of soaring export prices and the lifting travel restrictions.

Jakarta is targeting the same figure again this year. But analysts expect a slowdown in the coming months as record global commodity prices stoked by the Ukraine war start to ease.

“Lower commodity prices and weaker global demand weighed heavily on exports last quarter,” said Gareth Leather, senior Asia economist at Capital Economics.

“Our forecast that global growth will struggle and that commodity prices will remain subdued suggests that exports will stay weak.”

Leather predicted Indonesia’s quarterly growth would fall to around 4.5 percent in the coming months while official figures indicate it will remain at around five percent. AFP