PSE rallies to 9-month high on surprise BSP rate cut

Philippine shares rallied to its pre-pandemic level, hitting a nine-month on Friday, as investors welcomed the surprise interest rate cut by the Bangko Sentral ng Pilipinas which boosted optimism on the country’s economic recovery from the COVID-19 crisis.

The bellwether PSEi gained 172.17 points or 2.46% to 7,169.79. This is the highest so far for the local stock barometer in nine months when it closed at 7,226.9 on February 4, almost a month before the implementation of strict lockdowns that brought the economy in a standstill.

The broader All Shares increased by 91.85 points or 2.22% to 4,219.39.

“The PSEi had an exceptional day rallying by almost 2.5%, allowing it to end with a substantial gain for the week,” AAA Equities head of research Chris Mangun said.

“It may have been the surprise interest cut from the BSP that drew this extremely positive reaction. It gave investors confidence that the government is willing to do whatever it can to spur economic growth in the near future,” Mangun said.

The BSP on Thursday announced key policy rates will be cut effective Friday, November 20, 2020 — the overnight reverse repurchase (RRP) facility at 2%, the overnight deposit at 1.5%, and the overnight lending facility at 2.5%.

This week's gains mark three consecutive weeks of advances for the PSEi, according to Mangun.

Foreigners also boosted the market’s rally, buying P4.199 billion worth of shares and selling P3.988 billion for a net buying position of P211.335 million.

More than 32.035 billion shares valued at P10.939 billion, changed hands.—AOL, GMA News