Stocks edge higher on economic stimulus plans
Prospects of massive economic stimuli to counter economic devastation caused by the COVID-19 pandemic here and abroad brought a bit of relief to the battered stock market on Tuesday.The main-share Philippine Stock Exchange index (PSEi) firmed up by 30.9 points, or 0.65 percent, to close at 4,774.27 on Tuesday, tracking the rebound across regional markets as investors took heart from anti-COVID-19 pump-priming measures across the globe, especially in the United States.
The Philippines itself is also preparing a fiscal stimulus program to counter the effects of the coronavirus while the Bangko Sentral ng Pilipinas has embarked on its own massive monetary easing in the form of a fresh 50-basis point interest rate cut, 200-basis point reserve requirement reduction and a P300-billion bond buyback program.
On Tuesday, the Philippines also started the implementation of a tighter trading band for stocks, which now limited the daily decline of each stock to 30 percent from the previous 50 percent.The PSEi’s gains for the day, however, were capped by continuing uncertainties over the new virus.
Papa Securities said the pandemic remained a “significant overhang” to the markets. Initial PSEi support is seen at the 4,000 mark, which the brokerage house thinks could be retested in the near term, especially if America sanctions a nationwide lockdown.
“Despite all these efforts from central banks, here and abroad, monetary authorities are limited to helping keeping banks and businesses afloat while maintaining financial system stability. Central banks can also lower interest rates and or flood the system with liquidity to combat tightening credit conditions and to reignite loan demand. Monetary policy, however, is only one side of the equation with the fiscal side needing to do its share,” ING Philippines economist Nicholas Mapa said.By counter, the interest rate-sensitive property counter posted the biggest gain of 3.72 percent.
The holding firm and mining/oil counters both rose by over 1 percent.
On the other hand, the industrial counter declined by 3.16 percent while the services counter lost 1.01 percent. The financial counter slightly fell.
Value turnover for the day amounted to P5.08 billion. Domestic investors supported the market’s slight rebound on Tuesday, making up for some P1.05-billion worth of net foreign selling.
There were 114 advancers that outnumbered 68 decliners, while 31 stocks were unchanged. INQ
