LOCAL SHARES gained some momentum yesterday as investors reacted to news of monetary easing measures in the Philippines and United States.
The benchmark Philippine Stock Exchange index (PSEi) added 30.90 points or 0.65% to 4,774.27 on Tuesday. The broader all shares index also climbed 20.93 points or 0.71% to 2,947.95.
“The market inched up today as the US Fed pledged quantitative easing measures which seem to be ‘bottomless’,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message on Tuesday.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan pointed to the same driver, but noted that “some gains faded in the end as Senate failed to reach a stimulus agreement.”
The PSEi hit as high as 4,864.86 intraday until gains were trimmed to as low as 4,771.78.
Mr. Limlingan said among the things that helped sustain the climb was the announcement of the Bangko Sentral ng Pilipinas (BSP) that it is reducing big banks’ reserve requirement ratio (RRR) by 200 basis points starting March 30.
The central bank said this is expected to support domestic liquidity to combat the effects of the coronavirus disease 2019 (COVID-19).
“The sudden move is projected to inject an additional P200 billion into the economy and provide some cushion to the perceived slowdown,” Mr. Limlingan said.
Meanwhile, the US Federal Reserve on Monday rolled out an extraordinary array of programs to backstop an economy reeling from sweeping restrictions on commerce that scientists say are needed to slow the coronavirus pandemic and ultimately keep more people safe, Reuters reported.
Back home, sectoral indices at the PSE closed mixed yesterday. Property rose 90.86 points or 3.72% to 2,531.46; holding firms improved 59.04 points or 1.27% to 4,702.65; and mining and oil improved 49.29 points or 1.26% to end Monday’s session at 3,946.76.
On the declining side were industrials, which lost 187.72 points or 3.16% to 5,752.53; services, which fell 10.55 points or 1.01% to 1,030.54; and financials, which dipped 0.26 point or 0.02% to close the day at 1,103.87.
Some 565.34 million issues valued at P5.09 billion switched hands yesterday, from Monday’s 413.31 million issues worth P5.68 billion.
Advancers stood at 114, decliners at 68, and unchanged names at 31.
Net foreign selling grew to P1.05 billion from P443.77 million on Monday.
“Concerns remain as… Fitch…has downgraded its outlook on the Philippines’ full-year gross domestic product from 6% to 4%, (and revised) its outlook on our banking sector from ‘stable’ to ‘negative’. The daily rise in infections will keep investors on their toes until we see signs that it has been contained,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail. — Denise A. Valdez with Reuters