Stocks test all-time highs
Local share prices tested record highs at the end of the week following the central bank’s decision to cut yields on special deposit accounts (SDA) as part of efforts to encourage banks to boost lending.
The benchmark Philippine Stock Exchange Index (PSEi) rose for a second straight day to close at 6,167.64, 50.37 points or 0.82 percent ahead of the previous close. This was just a few points behind the index’s highest close of 6,171.70.
All sub-indices were in the green, led by financials (2.22 percent), driving up the broader all-shares index by 0.71 percent.
The Bangko Sentral ng Pilipinas’ policy-making Monetary Board on Thursday decided to keep rates for overnight borrowing and lending at 3.5 percent and 5.5 percent, respectively.
The interest rate on SDAs, in which banks have placements estimated at P1.7 trillion, was slashed to just 3 percent across all maturities. Previously, the SDA rates were set at a premium on top of the overnight borrowing rate.
“Some fund managers respond favorably to local monetary authorities’ move to retain benchmark policy rates during their latest meeting,” brokerage firm 2TradeAsia said Friday.
Local banks posted healthy gains following the SDA rate cut, led by Bank of the Philippine Islands (5 percent), Metropolitan Bank and Trust Co. (1.53 percent) and Philippine National Bank (2.06 percent).
Total volume reached 2.62 billion shares changing hands for P8.89 billion. The day’s 95 advancers led the 69 advancers, while 45 other traded issues were unchanged. Paolo G. Montecillo