Hunt on for cheap stocks as BSP fuels investors’ hopes

Philippine Stock Exchange, Bonifacio Global City. INQUIRER PHOTO/LYN RILLON

The local bourse may see another round of bargain-hunting this week, thanks to the Bangko Sentral ng Pilipinas (BSP) hinting at finally beginning to trim the 17-year high interest rate after keeping it unchanged for five consecutive times.

Philstocks Financial Inc. senior research analyst Japhet Louis Tantiangco expressed optimism the Philippine Stock Exchange Index might see some upward movement as investors cheered the potential cut in key policy rates.

“The prospects of a possible rate cut by the BSP as early as August following their less hawkish stance in their latest meeting may also give sentiment a boost [this] week,” he said.

Last week, BSP Governor Eli Remolona Jr. also floated the idea of cutting banks’ reserve requirement to spur liquidity in the market. Bringing the reserve requirement ratio down will free up more funds that can be tapped to service loans and stimulate spending.

“At its current level, the local market is still deemed to be attractive. Hence, episodes of bargain hunting are still possible in [this] week’s trading,” Tantiangco said.

The analyst noted that traders would also continue to digest first-quarter financial reports of listed companies in the coming days. He added investors were also likely to watch out for fresh leads to goad the market.

He pegged the market’s support at 6,400 and resistance at 6,700.

Last Friday, the benchmark index slid 0.14 percent, or 9.51 points, to close at 6,618.69 while the wider All-Shares index dipped 0.01 percent, or 0.37 percent, to end at 3,524.15. —TYRONE JASPER C. PIAD