Philippine share prices surged by more than 2 percent on Thursday as buyers swarmed the market following the announcement of the Federal Reserve that it would keep its interest rates unchanged, analysts said.
The benchmark Philippine Stock Exchange Index (PSEi) soared by 2.06 percent or 145.51 points to close the trading day at 7,210.90, while the wider All Shares jumped by 1.71 percent or 69.78 points to finish at 4,159.03.
Thursday’s rally was the highest close since October 28, 2015, when the local bourse reached 7,289.26, data from the PSE showed.
Joseph Roxas, president of Eagle Equities Inc. in a phone interview said that the Federal Reserve’s decision not to make any upward adjustment in their key interest rates is like “a shot in the arm,” and thus investors proceeded to purchase rather than dump shares during Thursday’s trading.
“The Federal Reserve’s meeting, which had a news conference at 2 a.m. Manila time, revised their economic outlook for the year although they retained most of their outlook for next year and 2018, respectively. Ultimately, the Fed’s decision to keep its rates unchanged gave the market a shot in the arm,” Roxas said.
In addition, Roxas noted that Thursday’s trading has somewhat defied the usual trend ahead of Holy Week, saying, “Normally, a week before, during, and after the Holy Week, investors stay out of the market because a lot of investors do not want to leave the market with so much at stake [stocks], because most investors are afraid that something horrible might happen while they [investors]are on vacation. Thus, stock market is supposed to be slow during this time of the year.”
Meanwhile, Victor Felix, equity analyst at AB Capital Securities Inc. agreed with Roxas, adding that stronger oil prices have further energized the local bourse.
“We have now breached the immediate resistance, which was 7,200. This is a good sign as the Federal Reserve’s recent meeting gave some clarity to the investors with regard to where the US economy is heading,” Felix said.
Felix further pointed out that another booster in the domestic stock market is the surged in the price of oil to $39 a barrel (West Texas Intermediate).
In addition, Lexter Azurin, head of research at Unicapital Securities Inc., in a text message concurred with Roxas and Felix, “The PSEi surged today along with the regional markets following the Fed meeting last night [Manila time] delaying further rate increases. This boosted the market sentiment.”
Total value turnover was strong at P7.75 billion, with winners prevailing over losers 126 to 54, while 42 issues were unchanged.
Foreign investors were net buyers Thursday, tallying P967.72 million.
All the sub-indices ended higher, with the services sector enjoying the highest gain of 2.74 percent.