By Denise A. Valdez
THE PHILIPPINE Stock Exchange index (PSEi) saw its biggest one-day jump in almost 13 years yesterday, driven by improved investor confidence over the government’s efforts to support the economy amid the coronavirus disease 2019 (COVID-19) pandemic.
The PSEi surged 373.82 points or 7.43% to 5,401.58 on Thursday, as the broader all shares index increased 185.69 points or 6.05% to 3,250.82.
This is the largest percentage climb the main index has recorded in a single day since Aug. 21, 2007 when it rose 9.82%.
“The market was up by almost 8%, as investors appreciated the government’s effort to combat the negative impact of COVID-19 pandemic in the economy,” Philstocks Financial, Inc. Research Associate Claire T. Alviar said via text.
She said among the drivers of optimism yesterday was the government’s plan to borrow up to $2 billion from multilateral lenders to mitigate the impact of the pandemic.
Another is the central bank’s commitment to purchase P300 billion worth of government securities from the Bureau of the Treasury, on top of its 50-basis-point (bp) cut in key rates last week and the 200-bp reserve requirement ratio reduction for big banks to 12% starting March 30.
“We think that these were the narratives that investors are looking into right now, and they were finding the battered stocks to bargain hunt and the stocks to benefit the most on the measures,” Ms. Alviar said.
For Regina Capital Development Corp. Head of Sales Luis A. Limlingan, the rally in the local bourse is also an effect of the approval of a massive economic stimulus bill in the United States.
The US Senate passed a $2-trillion emergency relief bill on Wednesday to support affected sectors by the COVID-19 pandemic. The bill will now be subjected to a vote by the House of Representatives on Friday.
At the PSE, all sectoral indices closed higher yesterday: property by 248.95 points or 9.33% to 2,916.21; financials by 96.33 points or 8.31% to 1,255.13; services by 73.97 points or 6.91% to 1,143; holding firms by 288.13 points or 5.80% to 5,255.89; industrials by 246.10 points or 4.10% to 6,245.73; and mining and oil by 130.58 points or 3.21% to 4,188.02.
Value turnover was trimmed to P7.67 billion with 590.86 million issues switching hands from Wednesday’s P8.30 billion with 929.07 million issues.
Advancers stood at 151, decliners at 48 and unchanged names at 26.
Foreigners remained sellers yesterday, but net outflows were trimmed to P680.11 million on Thursday from P1.67 billion on Wednesday.
“We think that sell on rally is still the best strategy for now given the increasing number of COVID-19 cases in the Philippines, and despite today’s market gain, foreigners were sellers by P680 million,” Philstocks Financial’s Ms. Alviar said on Thursday.