Stocks cheer BSP move

Local share prices rallied yesterday, tracking gains in most Asian bourses, as investors cheered the increase in the Bangko Sentral ng Pilipinas (BSP) rates to temper added pressures from a rising inflation.

Markets also welcomed a further easing in tensions on the Korean Peninsula, after US President Donald Trump said he would meet North Korean leader Kim Jong Un in Singapore on June 12 for talks on its nuclear weapons program.

The benchmark Philippine Stock Exchange index (PSEi) surged 2.39 percent or 181.11 points to finish for a second straight day in positive territory at 7,752.11.

The broader All Shares index followed suit, rising 1.71 percent or 79.24 points to close at 4,709.15.

“The Bangko Sentral ng Pilipinas rate hike helped in the upward trend,” Regina Capital Development Corp. president Marita Limlingan said.

The BSP on Thursday raised its key rates by 25 basis points to 3.25 percent, the first rate hike in more than three years.

“Investors continued to digest GDP (gross domestic product) and BSP rate hike and it’s the only day this week that foreign (funds) are coming back in,” IB Gimenez Securities Inc. head of research Joylin Telagen said.

Telagen said net foreign buying stood at P571 million yesterday.

Limlingan, however, pointed out that despite the 2.4 percent increase in the benchmark index, volume remained low at P5.7 billion, only a slight improvement from the P5.4 billion the previous day.

“This shows investors are still on the sidelines. The long weekend dampened investor appetite,” Limlingan said.

There will be no trading on Monday, when Filipinos vote for their barangay and Sangguniang Kabataan officials.

All local counters finished in the positive territory, each adding by at least one percent. Financials led the rally with a 2.53 percent increase, followed by holding firms and property which grew 2.41 percent and 2.38 percent, respectively.

Market breadth stayed positive as well, with advancers pummeling decliners, 116 to 80, while 49 stocks were unchanged.

2TradeAsia.com said Friday’s outcome was also buoyed by investors welcoming Wall Street’s advance, as well as better-than-expected first quarter earnings for majority of local listed firms.

Meanwhile, currency markets were largely muted during Asian trading. The dollar index was up 0.2 percent after falling the most since late March on Thursday.

Investors trimmed their expectations for four Fed rate hikes after inflation data showed US price pressures remained weak. The Fed has already raised rates once this year and is widely expected to go two more times in 2018.