Share prices rose Wednesday as investors bet on a rate cut in policy rate by the local central bank next month.
The peso closed up.
The Philippine Stock Exchange index was up 12.73 points to 6,619.09, a 0.19 percent hike.
The broader All Shares index was up 9.94 points to 3,597.71.
Gainers edged losers 86 to 92 with 63 stocks unchanged. Trading turnover reached P5.62 billion.
The peso closed at 58.365 up from Tuesday’s 58.645
The currency opened at 58.58, and hit a high of 58.35 and a low of 58.58. Trading turnover reached $1.3 billion.
Emerging Asian currencies rose on Wednesday, with investors awaiting the US Federal Reserve’s policy decision overnight.
Investors now await the Fed’s decision, with markets expecting the central bank to stay pat on interest rates. However, any commentary on a possible rate cut in September will keenly eyed.
Market participants have largely priced in a September rate cut, with more than 87 percent odds of a 25 basis-point reduction, according to the CME FedWatch tool.
The Fed cutting rates could pave the way for Asian central banks to start easing their own policy stances, even though this may not be as beneficial for emerging Asia, said Jonathan Koh, an economist and FX analyst at Standard Chartered.
“I think some (Asian) central banks could cut interest rates following the Fed, so in a way the interest rate differential may not actually narrow in favor of Asian currencies but usually when the Fed cuts, it may lead to a risk-on sentiment for EM (emerging market) Asia currencies,” Koh said.
A wider interest rate differential is usually beneficial for riskier emerging market assets as investors will seek higher returns, boosting capital inflows.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said investors are betting on the pronouncement of local monetary officials of a possible 25-basis point rate cut as early as August.
“The improving trend in local interest rates and bond yields recently supported market sentiment after local monetary officials recently reiterated a possible local policy rate cut as early as August 15,” Ricafort said.
Most actively traded BDO Unibank Inc. was up P0.50 to P137. Ayala Land Inc. was down P0.55 to P29.50. SM Investments Corp. was up P1 to P908. International Container Terminal Services Inc. was up P3 to P356. ACEN Corp. was up P0.25 to P5.49. Bank of the Philippine Islands was down P0.80 to P121.30. Philippine Seven Corp. was up P0.70 to P124.10. PLDT Inc. was up P22 to P1,515. SM Prime Holdings Inc. was down P0.45 to P28.80. Metropolitan Bank and Trust Co. was up P0.70 to P68.70.
