Local stocks bounce back, peso remains lethargic

MANILA — The Philippine Stock Exchange index (PSEi) ended its five-day slide and came back strong on Friday but the peso continued to lose ground to the US dollar as another trading week came to a close.

The main equities gauge ended the week at 7,583.82 points, up by 1.45 percent or 108.66 points.

Regina Capital managing director Luis Limlingan partly attributed this to the Bangko Sentral ng Pilipinas’ (BSP) decision to cut by 200 basis points the universal and commercial banks’ (U/KBs) reserve requirement ratio (RRR).

The cut will be implemented on a staggered basis of 100 basis points effective May 31, and 50 basis points each by June 28 and July 26. “Many view that that RRR cut will boost economic activity and growth, stave off deflation, and even encourage national government spending,” he said.

The positive closing of the main gauge for the week was mirrored by All Shares, which rose 1.08 percent, or 50.41 points, to 4,713.27 points.

Most of the sectors also ended with gains, led by the Services, 2.40 percent; and followed by Financials, 2.25 percent; Property, 1.61 percent; and Holding Firms, 1.06 percent. On the other hand, Mining and Oil fell 0.43 percent, and Industrial by 0.29 percent.

Volume reached 935.86 million shares amounting to PHP8.21 billion. Gainers led losers at 122 to 72 while 40 shares were unchanged.

On the other hand, the peso ended the week at 52.63 from Thursday’s 52.48 close.

A trader attributed this to lingering US-China trade issues, the latest news saying that the US has banned Huawei and ZTE from selling its products in the world’s largest economy.

The risk-off sentiment resulted in the weak opening for the local currency at 52.55 from the previous session’s 52.36.

It traded between 52.65 and 52.445, resulting in an average of 52.537. Volume surged to USD1.19 billion from the previous day’s USD715.27 million.

The currency pair is seen to trade between 52.30 and 53.70 next week.