Higher remittances lift peso, stock market
THE peso snapped a two-day losing streak and the stock market also rallied to a near two-month high on Tuesday, buoyed by a rise in money sent home by Filipinos working abroad.
The currency gained seven centavos to close at P57.21 to the dollar, while the benchmark Philippine Stock Exchange (PSEi) added 64.18 points, or 1.01 percent, to close at 6,418.94.
The broader All Shares also rose 0.81 percent, or 26.99 points, to 3,379.58.
The last time the PSEi closed in 6,400 territory was on September 20 when it hit 6,448.46.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso’s appreciation came “after the continued growth in OFW (overseas Filipino worker) remittances data to near record highs on a monthly basis that could help support the peso exchange rate with more US dollar structural inflows and also help support consumer spending.”
He also tagged remittances with regard to the PSEi’s gain, saying the growth “could support consumer spending, which accounts for at least
73 percent of the economy and [is] also a bright spot for the economy.”
Personal remittances by OFWs reached $3.15 billion in September, up 4.0 percent and 4.6 percent, respectively, from the year-earlier $3.03 billion and August’s $3.01 billion.
“The peso also appreciated after the latest easing in global crude oil prices to new two-week lows after
OPEC (Organization of Petroleum Exporting Countries) reduced its estimate for global crude oil demand,” Ricafort added.
Trading opened at P57.3 and ranged from P57.2 to P57.47 for the day. Total volume reached $766.9 million, up from $720.63 million in the previous session.
Claire Alviar, research associate at Philstocks Financial Inc., meanwhile, said net foreign buying had helped lift the stock market. “This month, net foreign buying was at P4.08 billion, with only one day of net foreign
selling due to the strengthening of the peso against the US dollar so far, trading at P57.21. Also, foreigners are coming back amid improving sentiment at home,” she said.
Luis Limlingan, managing director at Regina Capital Development Corp., said investors continued to buy into the Philippine market as they remained wary of the US Federal Reserve’s (Fed) next moves.
“Markets will get more inflation information on Tuesday (US time) when the producer price index, a measure of wholesale inflation, is released. Investors will also study comments from other Fed leaders as well in hopes for direction,” Limlingan added.
Except for property, which lost by 0.59 percent, all sectoral indices were in the green, with holding firms up the most, by 1.94 percent.
A little over 725.68 million shares worth P5.13 billion changed hands.
Advancers again outnumbered decliners, 102 to 83, while 49 securities remained unchanged.