BSP placates stocks from onslaught of volatile peso
The benchmark Philippine Stock Exchange Index (PSEi) rebounded on Monday after the Bangko Sentral ng Pilipinas (BSP) calmed the market and said it was ready to buoy the weakening peso.
By the closing bell, the PSEi was up 1.15 percent to 6,913.87 while the broader all shares index rose 0.84 percent, or 35.48 points, to 4,270.02.
Chris Mangun, research head at stock brokerage firm AAA Equities, said the currency volatility was “one of the main concerns right now due to its direct effect on the economy.”
“The market bounced back after BSP Governor Diokno expressed in an interview this morning that they are currently not worried about the weakness of the peso and that they are ready to step in and tame any sharp depreciation to stabilize it,” Mangun said in a note to investors on Monday.
The news lifted all subsectors, with gainers led by holding firms, up 1.62 percent, followed by mining and oil and services.
In the same note, Mangun warned the bounce could only be temporary. “Investors remain hesitant to increase positions … although they may opt to hold off on unloading shares, which will result in a sideways market,” he said.
Article continues after this advertisementA total of 2.09 billion shares valued at P4.83 billion changed hands on Monday.
