By Denise A. Valdez, Reporter
THE MAIN INDEX broke into the 5,000 level on Wednesday as investors celebrate the central bank’s reserve ratio cut, which is seen to help address the economic impact of the coronavirus disease 2019 (COVID-19) pandemic.
The 30-member Philippine Stock Exchange index (PSEi) rose 253.49 points or 5.31% to close at 5,027.76 on Wednesday. The broader all shares index climbed 117.18 points or 3.97% to 3,065.13.
“The local market’s rally today was primarily due to the BSP’s (Bangko Sentral ng Pilipinas) 200 basis point RRR (reserve requirement ratio) cut which will inject more liquidity into the economy as it fights the impact of the COVID-19 spread,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a text message on Wednesday
“The BSP has been utilizing its arsenal lately to mitigate the effects of the coronavirus on the economy from the aggressive policy rate cut, to the buying of government securities, to the RRR reduction. Investors are appreciating this,” he added.
As the Philippines projects as much as a 0.6% contraction in the economy due to COVID-19, the BSP has been rolling out monetary stimulus to help cushion the impact of the fall.
On top of local developments, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the rise in the PSEi was also driven by optimism in US markets.
“Philippine shares soared as investors bet US lawmakers would deliver soon a stimulus bill to rescue the economy from the damage caused by the coronavirus and shutdowns designed to stop its spread,” he said in a mobile message.
US senators and officials in US President Donald Trump’s administration have reached an agreement on a massive economic stimulus bill to alleviate the economic impact of the coronavirus outbreak, White House official Eric Ueland said on Wednesday.
Wall Street jumped on Tuesday, with the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite indices increasing 11.36%, 9.38% and 8.12%, respectively.
Back home, all sectoral indices ended in green territory on Wednesday. Holding firms gained 265.11 points or 5.63% to 4,967.76; property rose 135.80 points or 5.36% to 2,667.26; financials added 54.93 points or 4.97% to 1,158.80; industrials improved 247.10 points or 4.29% to 5,999.63; services increased 38.49 points or 3.73% to 1,069.03; and mining and oil climbed 110.68 points or 2.8% to 4,057.44.
Value turnover stood at P8.30 billion on Wednesday with 929.07 million issues switching hands, up from Tuesday’s P5.09 billion with 565.34 million issues.
Advancers beat decliners, 158 against 44, while 29 names ended unchanged.
Net foreign selling, however, increased to P1.67 billion from P1.05 billion on Tuesday. — with Reuters