Shares climb on bargain hunting, rate cut hints

PHILIPPINE SHARES rose on Tuesday as investors bought bargains and on expectations of rate cuts from the Bangko Sentral ng Pilipinas (BSP) this year.

The benchmark Philippine Stock Exchange index (PSEi) rose by 0.65% or 45.07 points to close at 6,898.17 on Tuesday, while the broader all shares index climbed by 0.56% or 20.34 points to end at 3,598.55.

“This Tuesday, the local market rose by 45.07 points (0.65%) to 6,898.17 as investors hunted for bargains at the last minute,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

“Contributing to the climb was Finance Secretary and Monetary Board member Ralph G. Recto’s statement saying that the BSP may cut interest rates this year by 50 basis points (bps). With Tuesday’s climb, the bourse joins its regional peers,” he added.

Mr. Recto said last week that the BSP could cut rates twice this year. However, he expects the country’s inflation rate to remain elevated.

The Monetary Board kept the policy rate at 6.5% for a third straight meeting in February.

The BSP hiked borrowing costs by 450 bps from May 2022 to October 2023 to help bring down elevated inflation.

“Philippines shares made a furious comeback with the quarter drawing to a close, with the help of the region’s strong gains from last week. Later, investors await March’s consumer confidence data, durable goods orders and the Richmond Fed’s manufacturing survey,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Majority of sectoral indices ended higher, led by services, which went up by 1.77% or 32.55 points to 1,865.23. Property climbed by 1.28% or 35.71 points to 2,817.47; industrials went up by 0.83% or 74.60 points to 9,032.71; and holding firms rose by 0.61% or 39.78 points to 6,477.28.

Meanwhile, financials went down by 0.94% or 19.22 points to 2,014.06, and mining and oil dropped by 0.62% or 51.49 points to 8,130.82.

Value turnover climbed to P7.62 billion with 698.89 million shares changing hands from the P5.49 billion with 553.24 million issues traded on Monday.

Decliners edged out advancers, 99 versus 98, while 48 names closed unchanged.

Net foreign selling surged to P1.79 billion on Tuesday from P246.47 million on Monday.

Meanwhile, Asian equities struggled for traction on Tuesday as mixed messages from US monetary policy makers and a wobble in the Chinese yuan left traders unsettled and tentative with Friday’s release of US inflation data hanging over the outlook, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%, led by chipmaker gains for South Korea’s Kospi. Other markets lacked direction and drifted either side of flat, with sentiment in China and Hong Kong still fragile after Friday’s sudden slide in the yuan. — R.M.D. Ochave with Reuters