Share prices surged Friday as investors welcomed the move of the Monetary Board of the Bangko Sentral ng Pilipinas to reduce the reserve requirement ratio of universal and commercial banks by 200 basis points within two months to 16 percent from 18 percent.
The Philippine Stock Exchange jumped 108.66 points, or 1.4 percent, to 7,583.82 on a value turnover of P8.2 billion. Gainers beat losers, 122 to 72, with 40 issues unchanged.
The lower reserve requirement is expected to free up an additional liquidity of about P231 billion into the financial system.
Banks led the market rally. BDO Unibank Inc., the biggest lender in terms of assets, rose 1.9 percent to P130.90, while Security Bank Corp., the sixth largest, advanced 8 percent to P175. Metropolitan Bank & Trust Co., the second-biggest lender, climbed 3.4 percent to P73.
International Container Terminal Services Inc., the largest port operator, rallied 4 percent to P139.90.
The rest of Asian markets were mixed Friday as another rally on Wall Street and data indicating a strong US economy were offset by the increasingly tense trade and technology stand-off between China and the United States.
The Brexit saga also moved back into view, with the pound at three-month lows on renewed concerns Britain will leave the EU with no deal as Prime Minister Theresa May tries to push her divorce deal through again.
And oil prices sank as trade worries overshadowed tensions in the Middle East where the US and Iran are growing increasingly hostile.
Hong Kong fell 1.2 percent in the afternoon and Shanghai tumbled 2.5 percent while Seoul shed 0.6 percent and Taipei dived 0.9 percent with Singapore dropping 0.7 percent.
Tokyo finished 0.9 percent higher, Sydney rose 0.6 percent and Mumbai jumped 0.8 percent.
New York’s three main indexes rose for a third successive day on the back of better-than-expected housing construction data and a dip in US jobless claims, while solid earnings from Walmart and tech firms Cisco Systems and Nvidia reinforced optimism.
The figures boosted sentiment after almost two weeks of volatility sparked by Donald Trump’s threat, and implementation, of higher tariffs on Chinese imports.
The move threw a spanner in the works for high-level China-US talks that seemed to be close to conclusion and led to a retaliation in kind from Beijing, fanning fears of a painful trade war between the economic titans.
Then on Wednesday Trump barred Chinese telecoms firms—effectively taking aim at giant Huawei—from the US market and added it to a blacklist restricting US sales to the firm.
China hit out at the move and warned against further harming trade ties.
But in light of the Wall Street rally, OANDA senior market analyst Jeffrey Halley said investors seem “to have temporarily given up trying to predict the fluid situation that is US-China trade relations and concentrate on the here and now.”
However, Rodrigo Catril at National Australia Bank said it was “hard to get too excited as the news flows on the trade front points to an escalation rather than an ease in tensions.” With AFP
