Index down anew as market remains cautious

MANILA, Philippines - Share prices continued to decline yesterday with investors cautiously watching China’s next move after it allowed the yuan to decline for two straight sessions, analysts said.

The benchmark Philippine Stock Exchange index (PSEi) went down anew by 55.63 points to settle at 7,439.80, while the broader All Shares index retreated 34.78 points to close at 4,263.77. 

Grace Cerdenia, research head at F. Yap Securities said there are fears regional central banks might need to adjust accordingly following China’s move to devaluate the yuan.

Cerdenia said the flow of funds would remain volatile as fund managers rebalance their portfolios. Investors, she said, should wait for the selling tide to abate.

Joseph Roxas, president of Eagle Equities said the country’s fundamentals are strong and are not likely to be shaken by the yuan’s devaluation.   

China devalued the yuan on Wednesday, sparking fears the world’s second largest economy is in worse shape than investors believed.

The industrial index was the biggest loser, plunging 207.53 points to close at 11,231.28. The holding firms index declined 13.74 points to finish at 6,777.39, while the services index lost 23.93 points to settle at 2,032.34.

Across Asia, shares and the dollar crept higher in early trade yesterday.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3 percent, taking heart from a late recovery on Wall Street that saw two out of three main indexes end in positive territory.

Japan’s Nikkei stock index was up 0.3 percent, shrugging off downbeat capital expenditure figures.