PSEi back at 6,400 level as BSP cuts rates again

PHILIPPINE STOCKS returned above the 6,400 line on Thursday as the Bangko Sentral ng Pilipinas (BSP) delivered a sixth straight rate cut to support demand amid weak economic prospects.

The benchmark Philippine Stock Exchange index (PSEi) rose by 0.19% or 12.38 points to close at 6,407.15, while the broader all shares index went up by 0.14% or 5.27 points to end at 3,547.32.

“The PSEi ended higher as bargain hunters resumed taking advantage of attractive valuations following recent declines,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Investors continued to assess the impact of the latest rate cut from the BSP, weighing its potential to support liquidity and market sentiment. The move helped improve risk appetite at the margins despite lingering concerns over subdued growth forecasts, allowing the benchmark to finish in positive territory.”

The BSP’s policy-setting Monetary Board slashed benchmark borrowing costs by 25 basis points (bps) for a sixth straight meeting, bringing its key rate to an over three-year low of 4.25%, as expected by all 16 analysts in a BusinessWorld poll.

It has now reduced interest rates by a total of 225 bps since it began its easing cycle in August 2024.

BSP Governor Eli M. Remolona, Jr. said future easing will largely depend on how soon confidence will recover, as weak sentiment has affected demand, making the output gap bigger. “We’re now in a situation where it’s more conditional on what happens to confidence and growth,” he said in a briefing.

“The local bourse bagged modest gains, buoyed by the strong rebounds in SCC and DMC, and complemented by the BSP’s 25-bp rate cut to prop up growth back to normal levels,” AP Securities, Inc. said in a market note, referring to the ticker symbols of Semirara Mining and Power Corp. (SMPC) and its parent DMCI Holdings, Inc. (DMCI).

Shares in both SMPC and DMCI posted large losses earlier this week due to the non-renewal of Semirara Mining’s coal contract. On Thursday, SMPC shares rose by P3.05 or 13.53% to P25.60 apiece. DMCI shares also went up by 80 centavos or 9.41% to P9.30 apiece.

Most sectoral indices closed higher on Thursday. Mining and oil rose by 3.76% or 674.06 points to 18,592.81; industrials increased by 1.2% or 108.64 points to 9,132.08; holding firms went up by 0.6% or 30.50 points to 5,085.65; and financials climbed by 0.06% or 1.31 points to 2,142.54. Meanwhile, property fell by 0.86% or 18.92 points to 2,172.36, and services slipped by 0.06% or 1.70 points to 2,690.26.

Advancers outnumbered decliners, 119 to 89, while 55 names closed unchanged.

Value turnover rose to P5.26 billion with 927.70 million shares traded from the P5.19 billion with 943.82 million issues that changed hands on Wednesday.

Net foreign selling was at P96.93 million versus the P467.67 million in net buying recorded in the previous session. — Alexandria Grace C. Magno