July 28, 2020 / 5:35 AM / 15 days ago

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

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3f2vwbA
    * Philippine stocks hit lowest since June 1
    * Thailand markets shut for holiday

    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 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 and PLDT were the biggest drags on
the benchmark index, 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.
. 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.
    "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 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                     -0.15       +2.92                     0.07           -3.91
    China                     -0.05       -0.55                     0.60           5.72
    India                     +0.00       -4.61                     0.39           -8.16
  Indonesia                   +0.07       -4.14                    -0.10          -18.85
  Malaysia                    +0.12       -3.67                     0.79           0.96
 Philippines                  -0.20       +2.91                     0.03          -24.99
   S.Korea                    -0.28       -3.59                     1.21           2.14
  Singapore                   -0.03       -2.50                     0.30          -19.84
   Taiwan                     +0.30       +2.33                    -0.10           4.82
  Thailand                    +0.00       -5.59                     0.00          -15.12
 
 (Reporting by Shashwat Awasthi in Bengaluru; Editing by Patrick Graham and Kenneth Maxwell)
  
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