Stocks vault to 9-month high on BSP rate easing

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Credit: Read the original article from PhilStar Business.

Stocks vault to 9-month high on BSP rate easing

Richmond Mercurio (The Philippine Star) – November 21, 2020 – 12:00am

MANILA, Philippines — The stock index returned to positive territory yesterday, ending at its highest level in 9 months, as a surprise interest rate cut by the Bangko Sentral and growing hopes of a virus vaccine lifted investor sentiment.

The Philippine Stock Exchange index (PSEi) surged 2.46 percent, or 172.17 points, as it moved past the 7,100-mark to settle at 7,169.79.

The broader All Shares index likewise jumped 2.22 percent, or 91.85 points, to finish at 4,219.39.

On Thursday, the Philippine central bank surprised markets with a 25 basis points interest rate cut to a new low of two percent as the country’s economy struggles with the pressure of  coronavirus.

“Loose monetary policy could be good for stock valuations and could drive a further rally for local bond yields,” said Jennifer Lomboy, a fixed income fund manager at First Metro Asset.

“Local shares cross well above 7,100 as investors bought up shares after the surprise cut of the BSP and by hopes that Washington lawmakers still could come together and pass a coronavirus aid relief package to limit the economic damage wrought by the pandemic,” Regina Capital Development Corp.  managing director Luis Limlingan said.

“Local shares rallied on news of successful COVID-19 vaccine trials, shrugging off early-week weakness brought about by the devastation left by Typhoon Ulysses,” 2TradeAsia.com said in a separate report.

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