PSEi surges to 6,300 level on BSP rate cut hopes

Philippine shares rallied for a sixth consecutive day on Monday as investors expect the Bangko Sentral ng Pilipinas (BSP) to resume its easing cycle as early as next month amid the positive outlook for inflation, especially with the implementation of measures to bring down food prices.

The benchmark Philippine Stock Exchange index (PSEi) rose by 0.99% or 62.48 points to end at 6,360.77, while the broader all shares index rose by 0.66% or 24.72 points to 3,748.92.

This was the PSEi’s highest close in nearly seven weeks or since it finished at 6,378.86 on Jan. 23.

“The local bourse rose, still on hopes that the Bangko Sentral ng Pilipinas will further ease its monetary policies following the significant slowdown in our inflation last February. Robust 2024 corporate results also helped in sustaining the market’s climb,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Philippine share continued the recovery, getting a boost from the better-than-expected CPI (consumer price index) reading and strengthening peso. Investors also came into the market also US equities bounced back on Friday,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Headline inflation sharply eased to 2.1% in February from 2.9% in January and 3.4% a year ago, marking the slowest inflation print in five months, the government reported last week.

This was also below the BSP’s 2.2%-3% forecast for the month and the 2.6% median estimate in a BusinessWorld poll of 18 analysts.

The February print brought average inflation to 2.5% in the first two months, well within the central bank’s 2-4% target.

The Monetary Board will review policy on April 3. Analysts said slower inflation last month will allow the BSP to resume its easing cycle following its surprise pause at the February review.

“The PSEi gained for the sixth straight trading day after the MSRP (maximum suggested retail price) for pork took effect today as part of the non-monetary measures to further bring down pork prices and overall inflation,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

All sectoral indices closed in the green on Monday. Mining and oil surged by 3.73% or 320.65 points to 8,895.44; property increased by 1.41% or 32.25 points to 2,306.61; industrials rose by 1.22% or 107.76 points to 8,881.43; services went up by 0.95% or 19.94 points to 2,101.71; holding firms climbed by 0.79% or 41.81 points to 5,293.01; and financials inched up by 0.64% or 15.26 points to 2,378.73.

Value turnover rose to PHP 6.41 billion on Monday with 627.42 million shares exchanged from the PHP 6.33 billion with 528.06 million issues traded on Friday.

Advancers beat decliners, 122 versus 76, while 48 names were unchanged.

Net foreign buying surged to PHP 1.41 billion on Monday from PHP 158.85 million on Friday. — R.M.D. Ochave