Clearer rate cut signal pushes PSEi past 6,400

MANILA, Philippines — The local bourse reclaimed the 6,400 level on the last trading day of the semester as a more dovish Bangko Sentral ng Pilipinas (BSP) reignited the hopes of a lethargic market.

By the closing bell on Friday, the benchmark Philippine Stock Exchange Index (PSEi) extended its winning streak as it gained 0.33 percent, or 21.33 points, to 6,411.91. The broader All Shares Index, on the other hand, added 0.26 percent, or 8.96 points, to close at 3,486.66.

A total of 1.16 billion shares worth P6.5 billion changed hands as foreigners made net purchases worth P393.53 million, stock exchange data showed.

READ: PSEI sustains upswing on Wall Street cues

The PSEi’s five-session winning streak comes on the heels of eight consecutive trading days of staying in the red as investors sought clearer signals of a rate adjustment from the BSP. A rate cut is expected to lower borrowing costs, thereby spurring spending and investments.

Claire Alviar, research analyst at Philstocks Financial Inc., said the local market on Friday was able to sustain its rally as investors “cheered the BSP’s signal of a possible rate cut by their August meeting.”

The central bank kept its policy rate at 6.5 percent for the sixth straight meeting on Thursday. However, Governor Eli Remolona Jr. said an August rate cut was “somewhat more likely than before” due mainly to an expected easing in inflation.

READ: BSP keeps rates unchanged as expected

The BSP likewise revised its inflation forecast for the year to 3.1 percent from 3.8 percent previously. For next year, the BSP also changed its inflation projection to 3.1 percent from 3.7 percent.

Policy rate unchanged

According to Remolona, prices were expected to ease in the second half of the year, allowing the Monetary Board more room to cut rates by a total of 50 basis points.

With a push from SM Investments Corp., GT Capital Holdings Inc., and Universal Robina Corp. (URC), conglomerates led the gainers on Friday, registering the biggest increase among subsectors at 0.93 percent.

Sy family-led BDO Unibank Inc. was the top-traded stock as it slipped by 1.38 percent to P128.20 each.

It was followed by International Container Terminal Services Inc., up 0.52 percent to P349.80; SM Prime Holdings Inc., up 1.80 percent to P28.30; Ayala Land Inc., down 1.55 percent to P28.50; and Globe Telecom Inc., up 0.48 percent to P2,100 per share.

Other actively traded stocks were URC, up 3.15 percent to P111.20; Bank of the Philippine Islands, down 0.42 percent to P119.10; GT Capital, up 7.83 percent to P620; SM Investments, up 1.65 percent to P830.50; and Jollibee Foods Corp., up 0.89 percent to P226 each.

Gainers edged out losers, 109 to 85, while 52 companies closed unchanged.