After staying in negative territory most of the week, the local stock market managed to bounce back before trading paused for the weekend, buoyed by the announcement by the Monetary Board on Thursday that it would keep benchmark interest rates steady.
Lexter Azurin, research analyst at Unicapital Securities Inc., indicated that since investors had been anticipating the announcement of the Bangko Sentral ng Pilipinas (BSP) on interest rates any announcement would have a significant effect on the market.
“The BSP kept policy rates steady with overnight borrowing and lending at 3.5 percent and 5.5 percent, respectively, but tweaked SDA [Special Deposit Accounts] rates higher by 25 basis points to 2.25 percent,” Justino Calaycay, Accord Capital Equities, Corp. analyst explained.
In its release, the BSP maintained that future inflation path is likely to stay within target over the policy horizon, although the balance of risks to the inflation outlook remains tilted toward the upside.
The Philippine Stock Exchange index (PSEi) recovered for the first time in six days, gaining 31.57 points, or 0.47 percent to close at 6,730.96, while the wider all shares added up 13.37 points, or 0.33 percent to 4,042.01.
All the sectoral indices also finished the week on a positive note, with mining and oil still posting the largest gains, rising 331.71 points, or 2.09 percent to 16,244.28. Financials added a percent to finish 15.91 points ahead at 1,594.03; the property index improved by 11.73 points, or 0.46 percent to 2,587.49, and industrials gained 31.08 points, or 0.30 percent to end at 10,305.61. Services also improved by 4.48 points, or 0.22 percent to 1,998.32, while holding firms inched up by 5.17 points, or 0.08 percent to 6,132.62.
Trading was active with 11.9 billion shares worth P31.5 billion changing hands, while advancing issues outnumbered decliners, 109 to 50, with 50 issues unchanged.
Some of the most actively traded stocks on Friday were Travellers International Hotel Group Inc., down 0.76 percent to P9.20; BDO Unibank Inc., up 0.34 percent to P89.30; Universal Robina Corp., down 0.53 percent to P151.40; and Metropolitan Bank and Trust Co., up 1.90 percent to P86.00.
Travellers’ shares tumbled after Megaworld Corp. moved to divest a total of 1.1 billion shares in the company to focus on its own real estate business. Megaworld sold to its parent firm Alliance Global Group Inc. (AGI) a total of 1.1 billion Travellers shares at the price of P9.27 per share for a total purchase price of P10.43 billion.
According to Megaworld, this will also allow its parent company AGI to benefit from the projected growth of Travellers through the expansion of its hotel, retail and gaming facilities.
On Thursday, Philippine shares officially retreated back to 6,600-support level ahead of the BSP monetary setting set later that day but managed to cut losses at the close.
PSEi particularly retreated and settled at 6,699.39, losing 3.74 points, or 0.06 percent, in contrast with the wider all shares, which slightly recovered with 4.93 points, or 0.12 percent to 4,028.64.
In contrast, most Asian markets rallied Thursday as investors welcomed the US Federal Reserve commitment to keep interest rates low.