PHILIPPINE stocks climbed the most in Asia, heading for their best seven-day rally in two decades, on optimism that the economic fallout from the coronavirus outbreak won’t be as bad as feared after Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said monetary-easing steps were appropriate.
The Philippine Stock Exchange Index climbed as much as 3.6% as of 12:14 p.m. in Manila, taking its seven-day rebound to 18%. The peso advanced to 50 against the U.S. dollar for the first time since January 2018 as Mr. Diokno signaled a pause in interest-rate cuts.
The nation’s shares have joined a global rally on hopes of the economic recovery after the coronavirus outbreak will be quick. The Philippine index has rebounded 40% from a low in March, and foreign investors are back to pouring money in the country’s equity funds this month.
“It’s being driven by optimism from the reopening of economies around the world, not only the Philippines,” said Japhet Louis Tantiangco, an analyst at PhilStocks Financial Inc. “Momentum is building up. Investors are focused on the prospects of a recovery,” he said, adding that investors are shrugging off geopolitical risks between U.S. and China.
The Philippine peso gained 0.2% against the U.S. dollar, climbing the most among Asian currencies. The nation’s 10-year bond yield rose for a third day Wednesday, adding two basis points to 3.28%.
Expectations of a shorter contraction are building since lockdowns in Manila and neighboring areas have eased starting June 1. A sustained climb for the Philippine index above 6,100 is a signal that “the rally has still some gas to test the 6,500,” said Jonathan Ravelas, a strategist at BDO Unibank Inc.
Shares of retailer SM Investments Corp. contributed the most to Thursday’s rally, while GT Capital Holdings Inc., Metropolitan Bank & Trust Co., and Robinsons Land Corp. gained the most, rising more than 6.5%. A total of 23 of the benchmark gauge’s 30 members climbed.
“This reopening comes with risk that infections will further spread as we allow more movements,” Mr. Tantiangco said. “The longer this rally goes on the more susceptible it is to profit-taking.” — Bloomberg
