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PH stocks index recovers, peso ends sideways

Risk appetite returned to the local bourse on Tuesday and allowed the main equities index to recover and the peso to end the day sideways against the US dollar. After starting the week on the red, the Philippine Stocks Exchange index (PSEi) ended the second trading day up by 1.01 percent, or 65.75 points, to 6,588.90 points. All Shares followed with a jump of 0.81 percent, or 28.26 points, to 3,519.36 points. Most of the sectoral indices also gained during the day, and these are the Holding Firms, 1.21 percent; Industrial, 1 percent; Property, 0.94 percent; Financials, 0.51 percent; and Services, 0.46 percent. Only Mining and Oil ended on the red after it dipped by 1.27 percent. Volume reached 2.7 billion shares amounting to PHP5.18 billion. Advancers led decliners at 94 to 91 while 53 shares were unchanged. ‘After the two consecutive selloffs, the local bourse was able to bounce today, settling at 6,588.90 points as the US market assess ongoing debt ceiling negotiations,’ said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales. Discussions between the White House and US lawmakers regarding the debt cap are on the critical stage, given that the world’s largest economy is said to likely default on its payments as early as June 1. On the local front, investors are on the wait-and-see stance for the rate decision of the Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) on Thursday. Relatively, oil prices sustained its rise, with the Brent crude futures up by 1.4 percent to USD75.23 per barrel, and the West Texas Intermediate (WTI) by 1.5 percent to USD71.11 per barrel, ‘bolstered by the prospect of tightening supplies in Canada and elsewhere.’ On the other hand, the peso ended sideways against the US dollar at 56.03 from Monday’s 56.07. It started the day at PHP 55.97 to the dollar and traded between 56.22 and 55.97, bringing the day’s average to 56.117. Volume reached USD1.3 billion, up from the previous session’s USD1.28 billion. Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the peso’s performance to the likelihood of a pause in the BSP’s rate tightening moves and the possible cut in banks’ reserve requirement ratio (RRR). The MB will have its rate-setting meeting on May 18 and so far, it has increased the central bank’s key rates by 425 basis points since May 2022 to help address the rising inflation rate. With the rate of price increases declining for three consecutive months to 6.6 percent as of last April, some economists said this gives the central bank some leeway to keep rates steady. For Wednesday, the peso is seen to trade between PHP55.90 to PHP56.10 to a US dollar.

Source: Philippines News Agency

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