PSEi trajectory hangs on BSP move

The fate of the Philippine Stock Exchange index (PSEi), which has been sold down lately, lies on the upcoming monetary policy meeting of the Bangko Sentral ng Pilipinas (BSP) this week.

Rastine Mercado, research director at Chinabank Securities, said that investors would like to take cues from the BSP’s decision on key interest rate adjustments, as well as corporate earnings releases.

The Monetary Board trimmed its benchmark rate by 25 basis points (bps) to 5.75 percent at the last policy meeting of 2024. In total, the BSP delivered a rate reduction of 75 bps.

In a commentary, Fitch Group unit BMI Research expects the BSP to cut interest rates by a total of 75 bps this year.

A policy rate cut this Feb. 13 is seen to provide a stimulus for the PSEi as this can spur spending and investments.

“Notwithstanding, we think that an uptick on Monday could set the stage for another leg of the rally – with the PSEi potentially reaching 6,500,” Mercado said, noting this also hinges on the release of the US jobs report.

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“In case prices continue to head lower still (closing below 6,150), then a test of the 6,000 support is likely,” he added.

On Friday, the benchmark PSEi fell by 1.39 percent or 86.98 points to close at 6,154.99. The broader All-Shares index slipped by 0.63 percent or 23.41 points to settle at 3,663.64.

“The local market extended its decline as investors continued with their profit taking,” Philstocks Financial Inc. senior analyst Japhet Tantiangco said.