(.) * Peso weakens 0.6% * Indonesian rupiah loses 0.4% * Investors await BSP and BOT meetings ahead By Rishav Chatterjee Oct 6 (Reuters) – Philippine equities dropped more than 1% and the peso weakened against the U.S. dollar on Monday, as investors stayed away from the archipelago over concerns tied to a corruption scandal and persistent social unrest. The MSCI Emerging Asia Index and a broader MSCI Asia-Pacific ex-Japan Index both eased about 0.5%, retreating from their highest levels since 2021 hit in the previous session. Trading volumes in emerging Asia equities stood well below the 30-day average as market closures in China, Taiwan, and South Korea affected momentum, with the latter two heavyweights being the major beneficiaries of the recent AI-driven rally. In the Philippines, the equity benchmark gauge dropped as much as 1.8%, snapping a three-day winning streak. The index lost 3.3% over the past month amid widespread protests pertaining to a widening corruption scandal. The Philippine president appointed a former Supreme Court justice in mid-September to head a new commission which will investigate alleged corruption in infrastructure projects, focusing on flawed flood control facilities exposed after monsoon rains and storms flooded towns and cities. "The market (Philippines) continues to be out of favour despite the recent sell off and unlikely to see improvement in the near term in my view," said Rajat Agarwal, Asia equity strategist at Societe Generale. Its currency, the peso, weakened 0.6% against the dollar on Monday, after having fallen over 2% in September. Investors are now focused on the Bangko Sentral ng Pilipinas (BSP) policy decision later this week. Maybank and DBS expect the central bank to hold rates steady, while Standard Chartered forecasts another cut. It is a tough call between a dovish hold or a hawkish cut, Aris Dacanay, an economist with HSBC, said, adding that the bank expects the BSP to hold its policy rate at 5.00%. Jakarta stocks were trading just below their all-time high scaled in early trade. The index was on track to end the session at a record closing level, as of 0706 GMT. Bangkok’s SET Index slipped 0.4%. In currency markets, the peso and Indonesian rupiah led declines in emerging Asia. The Singapore dollar eased 0.3%, while the Malaysian ringgit and Thai baht edged lower. Most ASEAN currencies, including the peso and rupiah, are under pressure, tracking weaker local equities and recent foreign outflows, said Christopher Wong, a currency strategist with OCBC. The Bank of Thailand meets later this week. Policymakers are widely expected to cut rates by 25 basis points, according to a Reuters poll, amid months of negative inflation, tepid exports, and a dovish tilt under the new governor. The baht, one of Asia’s best-performing currencies this year, had gained over 5% year-to-date by September before easing slightly in recent sessions. In other news, investor attention turned squarely to Japan, where the yen JPY= tumbled and stocks surged more than 4% after fiscal and monetary dove Sanae Takaichi was elected leader of the ruling party. HIGHLIGHTS: ** Indonesian 10-year benchmark flat at 6.327% ** Thai Sept headline CPI drops 0.72% y/y, more than forecast Asia stock indexes and currencies at 0706 GMT COUNTRY FX RIC FX DAILY FX YTD % INDEX STOCKS STOCKS % DAILY YTD % % Japan -1.71 +4.79 4.75 21.97 China India +0.01 -3.55 0.46 5.76 Indonesi -0.45 -3.10 0.30 15.01 a Malaysia -0.17 +6.05 0.03 -0.41 Philippi -0.55 -0.23 -1.78 -8.09 nes S.Korea Singapor -0.31 +5.62 0.12 16.62 e Taiwan — +7.77 — 16.18 Thailand -0.02 +5.97 -0.36 -7.94 (Reporting by Rishav Chatterjee in Bengaluru Editing by Shri Navaratnam and Mrigank Dhaniwala)
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