THE MARKET SURGED to the 6,500 level on Monday after the Bangko Sentral ng Pilipinas (BSP) governor signaled that he is open to a rate cut in their first policy meeting for next year.
The Philippine Stock Exchange index (PSEi) rose by 2% or 128.53 points to close at 6,534.91 on Monday, while the broader all shares index went up by 1.39% or 51.40 points to 3,727.23.
“The local market rallied on the back of hints from the Bangko Sentral ng Pilipinas of a possible policy rate cut in their first meeting for 2025,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message. “The recent rebound of the local currency against the US dollar also gave the market a boost.”
On Friday, BSP Governor Eli M. Remolona, Jr. told Bloomberg that the Monetary Board is open to delivering another rate cut at their first meeting of 2025.
Mr. Remolona said the BSP remains in an easing cycle and is “neither more dovish nor less dovish.”
The Monetary Board, at its final review for the year on Thursday, cut benchmark interest rates by 25 basis points (bps) for a third straight meeting to bring the policy rate to 5.75% from 6%.
The Philippine central bank has reduced borrowing costs by 75 bps thus far since the start of its easing cycle in August.
The BSP chief’s comments also boosted the peso. On Monday, the local unit closed at P58.45 per dollar, appreciating by 36 centavos from its P58.81 finish on Friday, Bankers Association of the Philippines data showed. This was its best finish in over a week or since Dec. 12’s P58.24.
“The local market benefited from positive spillovers from Wall Street’s rise last Friday driven by the US November personal consumption expenditures price index, which rose slower than expected,” Mr. Tantiangco added.
“Philippine shares finally bounced back… as investors prepare for the last trading week of the year,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “It will be a relatively quiet and shortened trading week, with the November budget balance set for release on Dec. 27. The Philippine equities market will be closed on Dec. 24 and 25 in observance of Christmas Eve and Christmas Day, respectively.”
All sectoral indices closed higher on Monday. Industrials went up by 2.97% or 264.21 points to 9,150.78; property climbed by 2.31% or 53.48 points to 2,368.11; mining and oil rose by 2.23% or 164.46 points to 7,526.29; holding firms increased by 1.78% or 98.59 points to 5,633.93; financials added 1.07% or 23.27 points to end at 2,179.86; and services jumped by 1.02% or 21.20 points to 2,095.10.
Value turnover dropped to P4.2 billion on Monday with 713.21 million shares traded from the P6.95 billion with 488.17 million issues exchanged on Friday.
Advancers beat decliners, 110 versus 72, while 53 names were unchanged.
Net foreign buying stood at P255.38 million on Monday versus the P777.85 million in net selling recorded on Friday. — Revin Mikhael D. Ochave