Philippine stocks rise before BSP policy decision

Philippine shares closed higher on Wednesday as investors await the policy decision of the Bangko Sentral ng Pilipinas (BSP).

The benchmark Philippine Stock Exchange index (PSEi) rose by 0.39% or 26.61 points to end at 6,854.53 on Wednesday, while the broader all shares index climbed by 0.31% or 11.35 points to close at 3,588.23.

“The local bourse bucked the trend in Asia, increasing by 26.61 points to 6,854.53, as investors awaited the decision and outlook of the BSP,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

A BusinessWorld poll of 17 analysts conducted last week showed 15 analysts expect the Monetary Board to maintain its target reverse repurchase rate at a 16-year high of 6.5% for a third straight meeting.

However, two analysts said the BSP may cut the policy rate by 25 basis points to 6.25% at the Feb. 15 meeting after inflation slowed to an over three-year low in January.

“Local shares edged higher as investors digested the implications of the hotter-than-expected US inflation print and braced for the upcoming BSP policy-setting meeting,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

US consumer prices rose more than expected in January amid a surge in the cost of rental housing, but the pick-up in inflation did not change expectations the US Federal Reserve will start cutting interest rates in the first half of this year, Reuters reported.

The increase in prices reported by the Labor department on Tuesday was the largest in four months and occurred against the backdrop of labor market strength and economic resilience.

The consumer price index (CPI) increased 0.3% last month after gaining 0.2% in December, the Labor department’s Bureau of Labor Statistics said.

In the 12 months through January, the CPI increased 3.1% after advancing 3.4% in December. Economists polled by Reuters had forecast the CPI would gain 0.2% on the month and rise 2.9% on a year-on-year basis. The annual increase in consumer prices has moderated from a peak of 9.1% in June 2022.

At home, the majority of sectoral indices went up on Wednesday. Industrials climbed by 0.59% or 54.36 points to 9,194.96; financials increased by 0.53% or 10.39 points to 1,970.23; holding firms rose by 0.43% or 27.73 points to 6,447.18; and property went up by 0.28% or 8.44 points to 2,948.55.

Meanwhile, mining and oil fell by 1.51% or 135.72 points to 8,826.73 and services dropped by 0.24% or 4.13 points to 1,716.97.

Value turnover went down to PHP 4.71 billion on Wednesday with 510.63 million issues changing hands from the PHP 4.95 billion with 557.12 million shares traded on Tuesday.

Advancers edged out decliners, 90 against 89, while 47 issues closed unchanged.

Net foreign buying rose to PHP 685.2 million on Wednesday from the PHP 81.06 million recorded the previous day. — R.M.D. Ochave with Reuters