Share prices ended higher yesterday on continued bargain hunting.
The peso closed down.
Felipe Medalla, Bangko Sentral ng Pilipinas (BSP) governor, said he hoped benchmark interest rates could be cut in 2024, and hinted the prospect of lowering reserve requirements for banks in the first half of this year.
The reserve requirement ratio for banks will be reduced when the central bank is no longer under pressure to raise benchmark rates, Medalla told ANC news channel. “We do not think it’s healthy to have 12 percent reserve requirement.”
For now, the BSP does not want to confuse the market as it continues with a series of rate hikes to combat elevated inflation, Medalla said.
“If the US is increasing policy rates, we need not match it but if it’s 50 (basis points), it’s hard not to respond, at least partially,” Medalla said.
Monetary authorities last cut its RRR, or the percentage of deposits and deposit substitutes banks must keep with the BSP, by 200 basis points in March 2020.
The Philippine Stock Exchange index (PSEi) was up 124.19 points, a .85 percent hike to 6,833.53.
The broader all shares index was up 48.58 points or 1.37 percent to 3,588.04.
Gainers edged losers 115 to 67 with 48 stocks unchanged. Trading turnover reached P7.68 billion.
The peso closed at 55.29 to the dollar, down from 54.80.
The currency opened at 54.95, an intra day low, and hit a low of 55.42. Trading turnover reached $1.46 billion.
The US dollar was steady ahead of the closely watched inflation data due later in the day, which will provide more clarity on how much inflation in the world’s largest economy has moderated and on the Federal Reserve’s rate-hike path.
Luis Limlingan, managing director at Regina Capital and Development Corp., said investors are betting on the US Fed slowing down its rate hikes after the latest release in inflation data overnight.
“All eyes are on December’s CPI (consumer price index) reading, to be released Thursday, with the consensus forecast calling for a slight easing in price pressures. Economists expect the consumer price index to dip 0.1 percent for December but rise 6.5 percent year on year, compared to a 0.1 percent monthly gain in November and an annual pace of 7.1 percent,” Limlingan said.
“Back home, investors digested recent signals from the BSP for a possible interest rate adjustment of up to 50 basis points and sustained hawkish commentaries form the Fed. Oil prices advanced on global economic optimism, despite a massive surprise build in US crude stocks,” he added.
Most actively traded BDO Unibank Inc. was up P4.10 to P114. SM Investments Corp. was up P4 to P904. International Container Terminal Services Inc. was up P3 to P204. Jollibee Foods Corp. was up P0.40 to P242. Universal Robina Corp. was up P1.60 to P140.30. Emperador Inc. was steady at P20.15. ACEN Corp. was down P0.06 to P6.95. PLDT Inc. was down P15 to P1,405. Ayala Corp. was up P24.50 to P732. Wilcon Depot Inc. was up P1.30 to P32.
