PSEi climbs to 6,500 level as rate cut bets grow

The main index climbed to the 6,500 level on Thursday despite low trading volume as market sentiment improved amid expectations of lower benchmark interest rates next year.

The Philippine Stock Exchange index (PSEi) climbed by 56.31 points or 0.87% to end at 6,519.11 on Thursday, while the broader all shares index went up by 24.70 points or 0.72% to close at 3,440.59.

“The index returned above the 6,500 level in thin trading as investor sentiment remained positive about the local market’s prospects for 2024,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

“We saw the same optimism across most Asian markets on the back of growing bets on the dovish direction of interest rates next year,” Mr. Colet added.

The PSEi rallied as investors see a “better year” in 2024, Mercantile Securities Corp. Head Trader Jeff Radley C. See likewise said in a Viber message.

“Interest rates are about to go down due to better economic data coming from the US,” he said.

Value turnover went down to PHP 2.8 billion on Thursday with 385.53 million issues changing hands from the PHP 3.95 billion with 1.44 billion shares on Wednesday.

Asian shares scaled five-month peaks on Thursday as market wagers on ever-more aggressive rate cuts extended a huge rally in US stocks and bonds, while also leaving plenty of scope for disappointment in the new year, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan added another 1.4% to be up 11% in two months and at its highest since August. Futures now imply an 88% chance of a rate cut as early as March, a huge swing from a month ago when the probability was just 21%.

The market has about 157 basis points of easing priced in for 2024, and sees rates reaching 3-3.25% over 2025.

“SPNEC (SP New Energy Corp.) is the only stock that is still making noise aside from index names. Recent corporate news of MVP Group taking control of SPNEC made it shoot up, ending today’s session at PHP 1.35,” Mr. See added.

Manuel V. Pangilinan, chairman and chief executive officer of Manila Electric Co., has taken over SPNEC after the completion of a PHP 15.9-billion investment.

“Philippine equities recorded modest gains as investors braced themselves to end the year 2023. Traders will monitor economic data on jobless claims and pending home sales,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

All sectoral indices rose on Thursday. Industrials went up by 100.20 points or 1.12% to 9,008.21; services increased by 15.38 points or 0.97% to 1,593.34; holding firms jumped by 59.75 points or 0.95% to 6,321.60; mining and oil climbed by 74.63 points or 0.76% to 9,801.69; financials inched up by 9.75 points or 0.56% to 1,736.83; and property added 10.70 points or 0.37% to end at 2,879.58.

Advancers outnumbered decliners, 124 to 61, while 36 names closed unchanged.

Net foreign buying went down to PHP 12.79 million on Thursday from PHP 114.06 million on Wednesday. — S.J. Talavera with Reuters