The stock market climbed back to the 8,700 level on Monday with investors said to have been heartened by lower bank reserve requirements and positive 2017 earnings results
The bellwether Philippine Stock Exchange index (PSEi) added 97.78 points or 1.14 percent to close at 8,710.22. The wider All Shares, meanwhile, gained 0.94 percent or 47.60 points to 5,123.20.
“The positive sentiment was buoyed by the [Monetary Board’s] decision to cut the reserve requirement ratio by 1 percent to 19 percent, which should free up bank funds and enable asset expansion,” Papa Securities Corp. deputy research head Arabelle Maghirang said.
“It looks like the index is back on track as it remained strong the entire day to break above its resistance at 8,700 to close at 8,710.22. Foreigners could also be back in the game as they were net buyers today of P44.9 million after being net sellers for 15 consecutive days,” she added.
The Bangko Sentral ng Pilipinas (BSP) announced last Thursday that its policymaking Monetary board had approved an “operational” reserve requirement ratio (RRR) cut effective March 2, 2018. The move, which means that the amounts banks are mandated to keep with the central bank will be reduced, is expected to free up about P90 billion in liquidity.
A Regina Capital Development Corp. analyst, meanwhile, said investors had resumed bargain-hunting after the Chinese New Year holiday and on expectations that listed firms would keep reporting positive 2017 results.
First Grade Finance, Inc. Managing Director Astro del Castillo echoed the view and said traders were repositioning following the release of fourth quarter and full-year earnings disclosurs.
All counters were up on Monday, led by financials that rose by 2.56 percent.
Volume turnover hit 7.35 billion shares valued at P9.68 billion.
Winners led losers, 141 to 65, while 44 issues were unchanged.