September 21, 2024 | 12:00am
MANILA, Philippines — The local stock market soared to a fresh high in over two years as the decision of the Bangko Sentral ng Pilipinas (BSP) to further lower the banks’ reserve requirements ratio (RRR) boosted investor sentiment.
The Philippine Stock Exchange index (PSEi) rose by 0.70 percent or 50.16 points to finish the week with a second straight victory at 7,252.32.
This was the PSEi’s highest close since ending at 7,288.07 on March 7, 2022.
The broader All Shares index also closed on the winning column, expanding by 0.62 percent or 23.94 points to 3,895.62.
Philstocks Financial research manager Japhet Tantiangco said the bourse, which is already cheering the Federal Reserve’s recent 50 basis point policy rate cut, received another boost as the BSP trimmed the level of reserves banks are required to keep with the central bank.
The RRR is the percentage of bank deposits and deposit substitute liabilities that banks cannot lend out and must set aside in deposits with the BSP. Reducing the level frees up more money into the financial system.
Tantiangco said that by augmenting liquidity, the move is expected to give the local economy a boost.
The PSEi closed last trading day in the green, buoyed by fund adjustments from the FTSE rebalancing and investor optimism after the BSP cut the RRR for local banks: 250 basis points (bps) for universal banks to seven percent, 200 bps for digital banks and 100 bps for thrift, rural and cooperative banks, effective Oct. 25, Luis Limlingan of Regina Capital said separately.
Trading was strong as net value turnover nearly doubled to P14.01 billion from the previous day’s P7.86 billion
All sectors concluded the session in the green, except for the property index, which declined by 0.70 percent.
Financials were on top, surging by 2.25 percent, followed by the industrial index with a 1.13-percent jump.
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