Shares up on bargain hunting before BSP review --[Reported by Umva mag]

PHILIPPINE SHARES inched higher on Monday on bargain hunting following their four-day slide and amid expectations that the central bank will cut benchmark rates further this week.

The Philippine Stock Exchange index (PSEi) rose by 0.22% or 16.09 points to end at 7,326.41 on Monday, while the broader all shares index rose by 0.23% or 9.56 points to close at 4,024.72.

“The local market bounced back this Monday as investors hunted for bargains after four straight days of decline. Expectations that the Bangko Sentral ng Pilipinas (BSP) will further ease their policy in their upcoming meeting this week gave the market a boost today,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

The BSP will likely cut benchmark interest rates by 25 basis points (bps) at its policy meeting on Wednesday to continue its easing cycle amid an improving inflation outlook, analysts said.

A BusinessWorld poll conducted last week showed that 16 out of 19 analysts expect the Monetary Board to reduce borrowing costs by 25 bps at its meeting on Oct. 16 to bring the policy rate to 6% from the current 6.25%.

On the other hand, two analysts expect the BSP to cut by a bigger 50 bps this week, while one sees the Monetary Board keeping rates unchanged.

In August, the BSP kicked off its easing cycle with a 25-bp cut.

“Also helping were the positive cues from Wall Street’s closing performance last week,” Mr. Tantiangco added.

US markets closed higher on Oct. 11 amid the better quarterly financial results of banks. The Dow Jones Industrial Average Index gained by 0.97% or 409.74 points to 42,863.86; the S&P 500 Index surged by 0.61% or 34.98 points to 5,815.03; and the Nasdaq Composite Index improved by 0.33% or 60.89 points to 18,342.94.

“Philippine shares made minor gains as investors gear up for another week of fresh economic data and events that will drive price action movement,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “Additionally, several Federal Reserve officials will be speaking throughout the week… Locally, the Monetary Board will hold its policy-setting meeting on Oct. 16.”

Almost all sectoral indices closed higher on Monday. Mining and oil rose by 2.04% or 176.28 points to 8,787.21; financials increased by 0.89% or 20.90 points to 2,360.34; property climbed by 0.79% or 23.04 points to 2,909.20; industrials went up by 0.21% or 20.87 points to 9,928.58; and holding firms added 0.04% or 2.94 points to end at 6,216.62.

Meanwhile, services dropped by 0.49% or 11.06 points to 2,232.46.

Value turnover declined to P3.88 billion on Monday with 660.35 million shares changing hands from the P5.51 billion with 692.95 million issues traded on Friday.

Advancers beat decliners, 128 to 73, while 54 names were unchanged.

Net foreign selling increased to P519.69 million on Monday from P27.44 million on Friday. — Revin Mikhael D. Ochave

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