Local markets up due partly to BSP rate hike

The Philippine Stock Exchange index (PSEi) increased by 0.43 percent, or 29.51 points, to 6,952.59 points. (Photo: qvist / ShutterStock)

MANILA — Philippines’ main equities gauge rose for the second consecutive day ahead of Bangko Sentral ng Pilipinas’ (BSP) announcement on its latest policy rate decision, while the peso also regained lost ground, reverting to the 52-level against the greenback on Thursday’s session.

The Philippine Stock Exchange index (PSEi) increased by 0.43 percent, or 29.51 points, to 6,952.59 points.

Bank of the Philippine Islands (BPI), in its market report, said the main index rose before the announcement of another hike in the central bank’s key policy rates by 25 basis points to 4.75 percent for the overnight reverse repurchase (RRP) facility rate to 4.75 percent, effective November 16, 2018.

To date, BSP’s policy-making Monetary Board (MB) increased the central banks key rates by a total of 175 basis points.

Rates of the overnight repurchase (RP) facility and the overnight deposit rate were also increased by 25 basis points.

Additional factors that lifted the PSEi are reports about the positive earnings report by listed firms.

The improvement of the main index was mirrored by the All Shares, which rose 0.30 percent, or 12.63 points, to 4,254.87 points.

It was a mix among the sectors, with the Financials and Industrial rising by 2.52 percent and 0.63 percent, respectively.

On the other hand, Holding Firms declined by 0.38 percent; Mining and Oil, 0.32 percent; Services, 0.27 percent; and Property, 0.07 percent.

Volume thinned to 779.12 million shares amounting to PHP6.51 billion.

Gainers surpassed losers at 90 to 89 while 48 shares were unchanged.

Meanwhile, the latest hike in the BSP rates are expected to boost risk-on sentiment in the local bourse.

“I think the higher rates will induce bargain hunting,” Regina Capital Managing Director Luis Limlingan told the Philippine News Agency (PNA) in an interview, adding that the rate uptick provides “more incentive to buy into the Philippine market.”

Relatively, the peso finished the day at 52.805 from 53.09 to a US dollar a day ago.

BPI, in its report, said the local unit performed in line with other currencies in the region due to weaker greenback.

The peso opened at 52.98 from 53.05 in the previous session.

It traded between 52.8 and 53.00, resulting to an average of 52.914.

Volume amounted to USD799.3 million, higher than the USD731.5 million Wednesday.

The currency pair is seen to trade between 52.70 and 52.90 Friday.