MANILA — Positive investors sentiment boosted both the Philippine peso, which firmed up to the 51-level against the greenback, and the Philippine Stock Exchange index (PSEi) Monday.
The local unit ended the week’s first trading day 51.91 from 52.16 Friday last week.
UnionBank chief economist Carlo Asuncion attributed the peso’s strength to expectations of slower inflation rate for May, which the government is scheduled to release on June 5.
The rate of price increases continued to decelerate with last April’s figure down to 3 percent from month-ago’s 3.3 percent. Average rate to date is 3.6 percent. Inflation peaked at 6.7 percent in September to October last year.
He explained that further drop of domestic inflation rate may prompt monetary officials to cut anew key policy rates after the 25 basis points reduction last May 9, with the reverse repurchase (RRP) rate now at 4.5 percent.
“This particular driver may have resonated more to investors than the protracted trade issues between US and China, and more recently between the US and its neighbor, Mexico,” he added.
For the day, the peso opened on an improved level of 52.15 from the previous session’s 52.228.
It traded between its opening and closing levels, resulting to an average of 52.016.
Volume reached USD782.85 million, lower than the USD988.32 million last Friday.
Relatively, the main equities gauge rose 1.44 percent, or 114.86 points, to 8,084.88 points.
All Shares followed with a 1 percent, or 48.64 points, increase to 4,939.01 points.
Property registered the higher jump among the sectors after rising 3.29 percent and was trailed by the Holding Firms, 1.16 percent; Industrial, 0.90 percent; Mining and Oil, 0.79 percent; Financials, 0.47 percent; and Services, 0.25 percent.
Volume reached 1.33 billion shares amounting to PHP10 billion.
Gainers led losers at 120 to 72 while 48 shares were unchanged. Joann Villanueva PNA – northboundasia.com