Stocks extend climb ahead of central bank meet

SHARES inched up further on Wednesday ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting.

The benchmark Philippine Stock Exchange index (PSEi) rose by 46.21 points or 0.7% to close at 6,635.11 on Wednesday, while the broader all-shares index went up by 14.48 points or 0.41% to 3,533.84.

“The local bourse breached the 6,600 psychological level again, gaining 46.21 points to 6,635.11, ahead of the meeting of the Bangko Sentral ng Pilipinas,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

“Some investors were pricing in already the possibility that the BSP may pause hiking rates, especially after the statement of the BSP Governor Felipe Medalla,” Ms. Alviar added.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message that the investors are awaiting the central bank’s rate decision.

The central bank is likely to keep policy rates unchanged this week as inflation continues to ease, Mr. Medalla said.

A BusinessWorld poll last week showed 13 out of 18 analysts expect the Monetary Board to pause its tightening cycle at its meeting on Thursday.

If realized, this would be the first time the BSP will leave interest rates untouched since it began hiking in May 2022.

The Monetary Board has raised borrowing costs by 425 basis points since May 2022 to help bring down elevated inflation, with its key rate now at 6.25%.

Headline inflation eased to an eight-month low of 6.6% in April, still above the BSP’s 2-4% target for the year.

“Moreover, the surge in total foreign investment pledges to the Philippines helped in lifting the sentiment,” Ms. Alviar said.

The value of foreign pledges approved by the country’s investment promotion agencies rose to PHP 172.7 billion during the first quarter, preliminary data from the Philippine Statistics Authority released on Tuesday showed.

This was about 20 times higher than PHP 8.98 billion in the same period last year, but slightly lower than the PHP 173.61 billion during the fourth quarter of 2022.

The majority of sectoral indices went up on Wednesday, except for mining and oil, which declined by 64.06 points or 0.62% to 10,142.37, and industrials, which fell by 1.30 points or 0.01% to 9,468.64.

Meanwhile, property rose by 35.78 points or 1.32% to 2,744.34; services increased by 18.64 points or 1.19% to 1,579.22; holding firms gained 40.50 points or 0.61% to end at 6,606.74; and financials went up by 1.76 points or 0.09% to 1,853.35.

Value turnover fell to PHP 4.34 billion on Wednesday with 1.07 billion shares changing hands from the PHP 5.18 billion with 2.7 billion issues traded on Tuesday.

Decliners narrowly outnumbered advancers, 97 versus 93, while 41 names closed unchanged.

Net foreign buying increased to PHP 153.35 million on Wednesday from PHP 30.77 million on Tuesday. — A.H. Halili