Shares up on easing rate hike, banking concerns

PHILIPPINE STOCKS inched higher on Tuesday amid easing rate hike expectations and banking concerns, although investors remained cautious due to recession fears.

The Philippine Stock Exchange index (PSEi) increased by 8.12 points or 0.12% to close at 6,603.15 on Tuesday, while the broader all shares index rose by 5.79 points or 0.16% to end at 3,519.86.

“The local bourse showed an 8.12-point or 0.12% gain to reach 6,603.15, thanks to the easing of banking fears after First Citizens BancShares purchased a large portion of Silicon Valley Bank,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

Ms. Alviar noted that value turnover was still weak as “most investors remained cautious while monitoring the banking sector.”

Value turnover increased to PHP 5.34 billion on Tuesday with 911.1 million shares changing hands from the PHP 3.63 billion with 390.14 million issues traded on Monday.

“The local bourse ended flat as the market remained polarized, weighing the positives of abating interest rate outlook and easing banking sector concerns against the negative of rising odds of a recession abroad,” AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message.

US regulators said on Monday that First Citizens BancShares had agreed to buy all of failed lender Silicon Valley Bank’s deposits and loans.

Concerns over the global banking sector following the collapse of two US banks have led market analysts to predict that the US Federal Reserve would pause its tightening cycle.

The Fed last week raised its target interest rate by 25 basis points (bps) to a range between 4.75% and 5%, bringing total increases since March 2022 to 475 bps.

Meanwhile, Finance Secretary Benjamin E. Diokno, a member of the Bangko Sentral ng Pilipinas’ (BSP) policy-setting Monetary Board, this week said the Philippine central bank could likewise keep rates unchanged in its May 18 meeting.

The Monetary Board last week hiked benchmark interest rates by 25 bps, bringing its policy rate to 6.25%.

Since May 2022, the BSP has raised rates by 425 bps to curb inflation.

Almost all sectoral indices closed higher on Tuesday except for financials which declined by 12.28 points or 0.68% to 1,780.15, and holding firms, which dropped by 13.40 points or 0.2% to 6,423.07.

Meanwhile, mining and oil rose by 224.99 points or 2.1% to 10,936.31; services increased by 27.35 points or 1.68% to 1,649.13; industrials climbed by 23.89 points or 0.25% to 9,546.52; and property went up by 0.48 point or 0.01% to 2,782.88.

Decliners outnumbered advancers, 95 versus 78, while 41 names closed unchanged.

Net foreign buying stood at PHP 725.13 million on Tuesday, a reversal of the net selling worth PHP 12.06 million seen on Monday. — AHH