BSP rate hike pushes up stocks, peso

BSP rate hike pushes up stocks, peso

By Joann Villanueva

For two consecutive days, stocks, peso move up again ending the week strong.

The expectations for another hike in the Bangko Sentral ng Pilipinas’ (BSP) key policy rates buoyed both the main equities index and the peso on Friday.

The Philippine Stock Exchange index (PSEi) was able to rise by 0.009 percent, or 0.69 points, to 7,507.20 points, which BPI Research attributed to hopes for another BSP rate increase within the year as hinted by BSP Governor Benjamin Diokno.

On Thursday, the policy-making Monetary Board (MB) slashed by 25 basis points the central bank’s key rates to help boost growth on the back of a low inflation environment.

To date, the BSP’s overnight reverse repurchase (RRP) rate is 3.75 percent, the overnight deposit rate is 3.25 percent, and the overnight lending rate is 4.25 percent.

The rate cut on Thursday brought the total reduction in the BSP’s key rates to 100 basis points, including the 75 basis points last year.

This, however, is still short of 75 basis points vis-à-vis the 175 basis points increase in 2018.

High hopes for another BSP rate cut, however, failed to lift the All Shares index, which fell by 0.002 percent, or 0.08 points, to 4,422.64 points.

It was a mix among the sectors, with Financials, Property, Mining and Oil, and Industrial up by 0.38 percent, 0.24 percent, 0.19 percent, and 0.07 percent, respectively.

Services and Holding Firms, meanwhile, fell by 0.51 percent and 0.36 percent, respectively.

Volume totaled 2.86 billion shares amounting to PHP5.33 billion.

Losers led gainers at 105 to 71 while 54 shares were unchanged.

Relatively, the peso ended the day at 50.755 against the US dollar from 50.78 on Thursday.

It opened the day at 50.85, sideways from its 50.82 starts in the previous session.

It traded between 50.86 and 50.74, resulting in an average of 50.78.

Volume totaled USD771.92 million, lower than the USD917.8 million in the previous day.

The currency pair is seen to trade between 50.60 and 50.90 on Monday. (First published in PNA) 

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