May 18, 2019
THE stock market snapped a five-day losing streak on Friday as investors took heart from the reduction of banks’ reserve requirements and hunted issues on oversold conditions.
The benchmark Philippine Stock Exchange index (PSEi) jumped by 1.45 percent or 108.66 points to close at 7,583.82, while the wider All Shares rose by 1.08 percent or 50.41 points to end at 4,713.27.
COL Financial Chief Equity Strategist April Lynne Tan said in a mobile message that investors cheered the Bangko Sentral ng Pilipinas’ cutting of reserve requirement ratio (RRR) on Thursday by 200 basis points (bps) to 16 percent from 18 percent.
The BSP said the reduction would be implemented in three stages. The first, totaling 100 bps, will take effect on May 31, followed by 50-bps cuts each on June 28 and July 26. The reduction is expected to boost liquidity in the market.
“The BSP’s move to reduce [RRR] … is the main catalyst for the investors to bargain-hunt on listed companies as this would enhance economic growth through increase in liquidity in the surrounding,” Diversified Securities Inc. trader Aniceto Pangan said.
Sectoral results were mixed, with the mining and oil and industrial the only losers down by 0.43 percent and 0.29 percent, respectively.
More than 935 million issues were traded valued at P8.2 billion.
Winners led losers, 122 to 72, while 40 issues remained unchanged.
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