PHL stocks rise on BSP chief’s hawkish comments

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PHILIPPINE STOCKS climbed further on Tuesday following hawkish comments from the central bank chief and amid excess liquidity due to Metro Pacific Investments Corp.’s (MPIC) tender offer.

The Philippine Stock Exchange index (PSEi) went up by 91.10 points or 1.47% to end at 6,263.94 on Tuesday, while the broader all-shares index rose by 36.23 points or 1.09% to 3,361.38.

“Shares on the Philippine Stock Exchange climbed as banks rally after central bank Governor Eli Remolona said he’s open to an unscheduled interest rate increase before the November meeting,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

“The local bourse bucked the trend across the region as most Asian stocks sank as the prospect of higher US rates and persistent concerns over a Chinese economic slowdown kept investors wary of regional markets,” Mr. Arce added.

Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. told Bloomberg on Monday that he is open to an off-cycle rate hike before their Nov. 18 meeting and also ruled out cuts in the near term.

The central bank kept rates unchanged for a fourth straight meeting last week but signaled it might resume tightening at its next meeting in November if inflation pressures persist.

The Monetary Board kept its target reverse repurchase rate at 6.25%. Interest rates on the overnight deposit and lending facilities were also left unchanged at 5.75% and 6.75%, respectively.

Investors also saw opportunities from MPIC’s tender offer, Unicapital Securities, Inc. Senior Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message.

“The index ended higher by 1.48%, notably outperforming other markets in the region, and this is likely attributable to the allocation of the extra liquidity brought about by MPI’s tender offer across the market as today marks the cross date for the transaction,” Mr. Temporal said on Tuesday.

In July, MPIC said the tender offer price went up to P5.20 per share from P4.63 per share initially offered by the consortium, which is backed by First Pacific Co. Ltd., GT Capital Holdings, Inc., and Mitsui & Co. Ltd.

Last week, MPIC told the local bourse that the tender offer had closed, with the cross date scheduled on Sept. 26 and the settlement date on Sept. 28.

All sectoral indices went up on Tuesday. Property rose by 41.24 points or 1.6% to 2,607.22; financials climbed by 28.79 points or 1.6% to 1,823.31; holding firms increased by 90.27 points or 1.54% to 5,952.13; industrials went up by 98.86 points or 1.12% to 8,923.01; mining and oil added 61.04 points or 0.58% to end at 10,445.83; and services inched up by 6.12 points or 0.41% to 1,498.05.

Value turnover surged to P35.16 billion on Tuesday with 6.41 billion shares changing hands from the P8.48 billion with 1.79 billion shares seen on Monday.

Advancers outnumbered decliners, 115 versus 59, while 53 shares closed unchanged.

Net foreign selling rose to P15.20 billion on Tuesday from P316.23 million on Monday.