RECOVERY. The decline in the prices of commodities in the world market boosts sentiments and results in the positive close of both the Philippines' main equities index and the peso on Friday (July 8, 2022). Analysts said hints from the central bank of more aggressive rate hikes also contributed to positive sentiments during the day. (PNA file photo)
MANILA – The Philippines’ main stocks index recovered on Friday and the peso recovered to the 55-level against the US dollar partly on the decline of commodity prices in the international market.
The Philippine Stock Exchange index (PSEi) reversed its path and rose by 0.15 percent, or 9.50 points, to 6,361.82 points.
All Shares followed with a jump of 0.16 percent, or 5.37 points, to 3,410.76 points.
Most of the sectoral indices also gained during the day namely Industrial, 1.07 percent; Financials, 1.01 percent; Mining and Oil, 0.98 percent; and Services, 0.41 percent.
On the other hand, Property fell by 0.89 percent and Holding Firms by 0.33 percent.
Volume was thin at 538.26 million shares amounting to PHP6.6 billion.
Advancers led decliners at 92 to 72, while 62 shares were unchanged.
“Philippine shares eked out modest gains to sustain its winning streak ahead of the key jobs report, while investors reacted to a recent drop in commodity prices,” Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales, said.
Other factors seen to have buoyed sentiments during the day include the drop in commodity prices and recovery of the oil prices “as investors returned their focus to a potential global recession,” he said.
He said Brent crude futures rose by 3.9 percent to USD104.65 per barrel and the US West Texas Intermediate (WTI) by 4.26 percent to USD102.73 per barrel.
The hawkish statement from Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla on rate increases following the dip of the Philippine peso to the 56-level against the US dollar also contributed to the positive sentiments, he added.
Relatively, the local currency appreciated against the US dollar after finishing the week at 55.92 after ending the previous day at 56.06.
It opened the day flat at 55.9 and traded between 55.845 and 56.13. The average level for the day stood 55.971.
Volume is lower at USD1.07 billion from USD1.11 billion in the previous session.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the peso corrected but its finish remained among the weakest in almost 17 years or since ending the trade at 56.00 to a dollar on Oct. 4, 2005.
“(It corrected) after signals of a more aggressive local policy rate hike of +0.50 on the next rate-setting meeting on August 18, 2022 that could help support/stabilize the peso exchange rate vs. the US dollar,” he said in a report.
He was referring to the fifth rate-setting meet of the Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) for the year.
BSP Governor Felipe Medalla on Thursday indicated openness to hiking the central bank’s key rates by as much as 50 basis points to help address inflationary pressures caused by, among others, the depreciation of the local currency.
The MB has increased the BSP’s key rates by 50 basis points, 25 basis points each last May and June, after noting that the continued recovery of the domestic economy provides monetary authorities to hike the key rates to help address the accelerating inflation rate. (PNA)
