MANILA – Both the Philippine peso and the Philippine Stock Exchange index (PSEi) ended Thursday almost unchanged partly on Congress’ approval of the Financial Institutions Strategic Transfer (FIST) measure.
The local currency ended the day’s trade at 48.045 to a US dollar, barely changed from its 48.066 close a day ago.
It opened the trade at 48.06 and traded between 48.07 and 48.04, resulting in an average of 48.059.
Volume totaled USD674.59 million, higher than the previous day’s USD499.86 million.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the peso ended to its more than four-year high when it closed at 47.99 on Sept. 23, 2016.
He traced this strength to the approval by the Bicameral Committee of the proposed FIST Bill, which is targeted to aid financial institutions to unload their sourced assets.
“The financial markets are anticipating the seasonal surge in OFW (overseas Filipino worker) remittances and conversion to pesos for Christmas-related spending, especially for the next one week,” he also said.
Ricafort said another plus factor for the peso is the “continued progress on nearly USD900 billion US stimulus package and the Federal Reserve pledged to maintain its massive asset purchase program until it sees substantial further progress in employment and inflation.”
He forecasts the peso’s immediate support level to be around 48.00 before strengthening to 47.80-47.90 levels.
The main equities index shed by 0.02 percent, or 1.68 points, to 7,298.02 points.
All Shares lost 0.004 percent, or 0.16 points, to 4,350.29 points.
Most of the sectoral gauges finished the day on the red, led by Property with a drop of 0.92 percent.
Industrial slipped by 0.54 percent, Financials by 0.53 percent, and Mining and Oil by 0.25 percent.
On the other hand, Services increased by 0.68 percent and Holding Firms by 0.67 percent.
Volume totaled 32.64 billion shares amounting to PHP9.3 billion.
Losers surpassed gainers at 117 to 105 while 49 shares were unchanged.
Ricafort said even with the drop in the main index, PSEi’s close Thursday is still its “highest in nearly 10 months (since February 21, 2020), up from the intra-day low of 7,236.82.
This, he said, is “still a sign of strength after the FIST Bill was approved by the lawmakers/Bicam and ahead of the BSP monetary policy-setting meeting.”
He was referring to the last rate-setting meet of the policy-making Monetary Board (MB) during the day, wherein which it kept the Bangko Sentral ng Pilipinas’ key rates steady after citing the benign inflation environment.
“The financial markets are also anticipating possible approval of the 2021 national budget by President (Rodrigo) Duterte as early as before Christmas,” he said.
He forecasts PSEi’s next resistance level to be around 7,500 “and then the 7,800 levels, as next breakout points for further upside potential, going forward.” (PNA)