RESILIENT. The Philippines' main stock index ended up Monday amidst the trading holiday in Asian markets due to the Chinese New Year. The peso also kept its footing and ended flat against the US dollar partly due to dovish statements from Philippine and US monetary authorities as well as the rise of the Philippine Stock Exchange index (PSEi). (PNA file photo)

MANILA – The local bourse managed to end higher in the week’s first trading day amidst the suspension of trading in Asia due to the Chinese New Year, while the peso kept its footing against the US dollar.

The Philippine Stock Exchange index (PSEi) rose by 0.19 percent, or 13.06 points, to 7,069.68 points.

All Shares followed with a jump of 0.23 percent, or 8.39 points, to 3,691.25 points.

Half of the sectoral indices also gained during the day, namely Holding Firms, 0.63 percent; Financials, 0.24 percent; and Services, 0.22 percent.

On the other hand, Mining and Oil shed by 0.80 percent; Industrial, 0.35 percent; and Property, 0.33 percent.

Volume reached 1.24 billion shares amounting to PHP8.35 billion.

Advancers led decliners at 99 to 92 while 55 shares were unchanged.

“Philippine shares still managed to eke out gains even with Asian markets on holiday, and with the big economic releases happening later,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales, referring to the celebration of the Chinese New Year.

Relatively, the local currency was unchanged against the US dollar at PHP54.54.

It opened the day at PHP54.4 to a dollar, and traded between 54.6 and 54.3, which brought the day’s average to PHP54.388.

Volume reached USD1.24 billion, higher than the USD1.05 billion Friday last week.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort attributed the peso’s closing on Monday to, among others, the dovish signals from the Federal Reserve and the Bangko Sentral ng Pilipinas (BSP), which both hinted of continued, but lower, rate hikes on expectations that inflation will continue to decelerate in the case of the US, and is expected to have peaked last December for the Philippines.

He also noted the decline of rate of locally-issued securities due to indications on the path of local policy rates.

“Nevertheless, the recent trend in the US dollar/peso exchange rate is still consistent with the weaker US dollar story recently, as the gauge of the US currency versus major global currencies continued to linger among 7.5-month lows, and recent signals from some Fed officials of possible smaller +0.25 Fed rate hike/s in the first quarter (1Q) of 2023 amid easing/improving US inflation/CPI (consumer price index) data recently,” he said.

US’ CPI slowed further to 6.5 percent on an annual basis last December from month-ago 7.1 percent.

On the other hand, Philippines’ headline inflation rose to its highest since November 2008, to 8.1 percent last December, but monetary authorities expect this to have peaked, thus, the statements for further hikes in the central bank’s key rates but at a lower level than 75 basis points.

Ricafort said “the relatively stronger peso exchange rate versus the US dollar recently, among the strongest in 7 months, also partly supported the recent gains in the local financial markets, especially the stock markets and the bond markets.”

For Tuesday, he forecasts the peso to trade between PHP 54.45 – PHP 54.65 to a US dollar. (PNA)