Stocks rose for a third day, sending the benchmark index above the 6,600-point level, after the Bank of Japan announced a new round of economic stimulus that boosted the Asian markets, including the Philippines.
The Philippine Stock Exchange index, the 30-company benchmark, gained 124 points, or 1.9 percent, to close at a three-week high of 6,687.62 on Friday. The gauge, however, was still down 3.8 percent since the start of the year.
The heavier index, representing all shares, also rose 61 points, or 1.6 percent, to settle at 3,812.87, on a value turnover of P9.8 billion. Advancers outnumbered losers, 116 to 53, while 46 issues were unchanged.
Nineteen of the 20 most active stocks ended in the green, led by retailer SSI Group Inc., which surged 28 percent to P3.20. Casino operator Melco Crown (Philippines) Resorts Corp. jumped 10.2 percent to P2.26, while conglomerate JG Summit Holdings Inc. climbed 6.9 percent to P67.
Property developer Megaworld Corp. advanced 4.4 percent to P3.57, while food manufacturer Universal Robina Corp. gained 3.2 percent to P193.
Meanwhile, the Bank of Japan’s shock announcement that it would charge banks to hold their cash sent Asian markets surging and the yen tumbling Friday as investors ended a highly volatile month with a bang.
Trading floors across the planet have been awash with red in January as investors endured one of the worst starts to a year in recent history, hit by China’s economic crisis, weak global growth and crashing oil prices.
However, some stability seemed to be established over the past week on hopes that the Bank of Japan and European Central Bank will provide some support.
And on Friday, Japanese bank policy makers stepped up, unveiling a new weapon in their long-running fight against anaemic economic growth and deflation.
After a two-day meeting the bank’s policy committee said it would adopt a negative interest rate policy, meaning banks pay to park their cash in the BoJ. The move aims to give banks an incentive to boost lending, which in turn should help fuel economic growth.
A similar policy was adopted by the European Central Bank in 2014, the first time by a major central bank.
“It’s a surprise,” Hideaki Kuriki, a bond investor in Tokyo at Sumitomo Mitsui Trust Asset Management, told Bloomberg News. “They think the ECB policy is successful so they’re taking the same policy.”
The news sent Japan’s Nikkei stock index soaring more than three percent at one point before paring the gains slightly to sit 1.7 percent higher. But the yen held its losses. The greenback jumped to 120.30 yen in the afternoon, up from 118.60 yen before the announcement. With AFP, Bloomberg