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EMERGING MARKETS-Philippine peso weakens after Duterte address, telecoms threat

Credit: REUTERS/ELOISA LOPEZ

The Philippine peso slipped and Manila stocks touched a near-two-month low on Tuesday after an address by President Rodrigo Duterte fell short of market hopes for coronavirus recovery plans while aiming threats at the country's telecom firms.

By Shashwat Awasthi

July 28 (Reuters) - The Philippine peso slipped and Manila stocks touched a near-two-month low on Tuesday after an address by President Rodrigo Duterte fell short of market hopes for coronavirus recovery plans while aiming threats at the country's telecom firms.

In his state of the nation address on Monday, Duterte defended his approach to fighting the pandemic even as new cases continue to climb, and rapped telecom service providers for what he called "lousy" services.

The peso PHP= has appreciated for the last six weeks, shrugging off a surge in infections and fresh U.S.-China tensions, but it gave up 0.2% on Tuesday.

Shares of Manila-listed Globe Telecom GLO.PS and PLDT TEL.PS were the biggest drags on the benchmark index .PSI, which dropped as much as 1% before recouping some of its losses.

A 5% fall in July has brought the index's losses this year to more than 25%, among Asia's worst, compared with a drop of only 1% for MSCI's broadest index of Asian shares ex-Japan. .MIAPJ0000PUS. Bourses elsewhere among the region's emerging markets posted gains on Tuesday.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said the Duterte address "was expected to say more about the economic recovery plan and the healthcare aspect of the COVID-19 spread and its subsequent control."

"I expected a very forward-looking and hopeful speech that would help propel the economy and tackle head-on the challenges of the once-in-a-lifetime health and economic crisis," he said.

Most other Southeast Asian currencies firmed modestly, benefiting from global weakness that has plagued the U.S. dollar since last week, driving the greenback to a near two-year low.

Stock markets globally were buoyed by hopes that the U.S. Federal Reserve would reiterate its accommodative stance on Wednesday and signal it was ready to unleash even more stimulus spending to prop up the world's largest economy. MKTS/GLOB

"We think that Fed Chair Powell is unlikely to change his dovish tone and is likely to shed light on how much more accommodative monetary (policy) can be," DBS Group Research strategists wrote, adding that the bank's stance had been priced into markets.

Still, Indonesian stocks .JKSE missed out on the gains, edging 0.2% lower as the country's total number of coronavirus cases topped 100,000.

Asia stock indexes and currencies at 0401 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

-0.15

+2.92

.N225

0.07

-3.91

China

CNY=CFXS

-0.05

-0.55

.SSEC

0.60

5.72

India

INR=IN

+0.00

-4.61

.NSEI

0.39

-8.16

Indonesia

IDR=

+0.07

-4.14

.JKSE

-0.10

-18.85

Malaysia

MYR=

+0.12

-3.67

.KLSE

0.79

0.96

Philippines

PHP=

-0.20

+2.91

.PSI

0.03

-24.99

S.Korea

KRW=KFTC

-0.28

-3.59

.KS11

1.21

2.14

Singapore

SGD=

-0.03

-2.50

.STI

0.30

-19.84

Taiwan

TWD=TP

+0.30

+2.33

.TWII

-0.10

4.82

Thailand

THB=TH

+0.00

-5.59

.SETI

0.00

-15.12

(Reporting by Shashwat Awasthi in Bengaluru; Editing by Patrick Graham and Kenneth Maxwell)

((Shashwat.Awasthi@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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