Philippine Peso Drops to Two-Week Low on Stock Market Outflows
The Philippine peso fell to a two- week low and government bonds advanced after foreign investors pulled money from local stocks as the benchmark share gauge extended its retreat from a record.
Funds based overseas sold $47 million more local stocks than they bought in the first two days of this week, exchange data show. The Philippine Stock Exchange Composite Index (PCOMP) has lost 6.1 percent since reaching its highest close on March 6. The dollar gained against most major currencies today as investors favored the safest of assets after the Cypriot parliament voted down a bank-deposit levy needed to secure a bailout, risking renewed tumult in Europe.
“There are stock-market outflows and the dollar is a bit strong against other currencies because of the Europe concern,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. (BDO) in Manila. “The stock market is overvalued.”
The peso weakened 0.1 percent to 40.737 per dollar in Manila, according to prices from Tullett Prebon Plc. It touched 40.763 earlier, the lowest level since March 7. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, increased 15 basis points, or 0.15 percentage point, to 3.82 percent.
The yield on the 6.125 percent government bonds due October 2037 dropped six basis points to 4.13 percent, according to noon fixing prices from the Philippine Dealing & Exchange Corp.
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