Philippine share prices resumed a rally on Monday as the benchmark index breached the 7,500-point level on the ‘surprise’ decision of the Bangko Sentral ng Pilipinas to cut its overnight lending and borrowing rates.
The Philippine Stock Exchange Index (PSEi) reversed early losses and gained 1.008 percent or 74.95 points to close at 7,511.74, while the broader All Shares gained 0.88 percent or 38.9 points to end at 4,451.16.
Justino Calycay, head of research and marketing at A&A Securities Inc. said that the market has further strengthened on account of the BSP’s decision to cut its overnight lending and borrowing rates.
“It was quite a surprise for the market. The BSP last week decided to keep its key interest rates, then today [Monday] it cut its overnight lending and borrowing rates, thus surprising the market, positively speaking,” Calaycay said.
He explained that the move by the BSP would lower the cost of doing business in the country, and encourage businessmen to borrow at a lower interest rate.
Except for the services sub-index, all sectors enjoyed gains with the mining and oil counter leading the pack with a 2.5 percent-increase.
A total of 2.29 billion shares worth P9 billion were traded with gainers outpacing losers 143 to 79, while 116 issues were unchanged.