The Philippine Stock Exchange index (PSEi) sustained its rally Friday, boosted by investor optimism after the Bangko Sentral ng Pilipinas cut the reserve requirement ratio (RRR) of local banks.
The 30-company benchmark climbed as high as 7,300 at mid-trading before closing at 7,252.32, still up by 50.16 points. The broader all-shares index ended at 3,895.62, up by 23.94 points, or 0.62 percent from Thursday.
All indices ended in the green, except for property which declined by 0.70 percent. Financials rose 2.25 percent, while industrial went up by 1.13 percent. Services also increased by 0.92 percent, mining by 0.91 percent and holding firms by 0.66 percent.
“This RRR cut will be good for banks as it will help boost margins. It will also lead to lower borrowing costs, which will hopefully trickle down to the economy sooner than later,” COL Financial research head April Lee-Tan said.
The BSP reduced RRR by 250 basis points for universal banks to 7 percent. It also cut the RRR by 200 bps for digital banks and 100 bps for thrift, rural and cooperative banks effective Oct. 25, 2024.
“In plain English, that’s an estimated P375 billion in fresh cash released into the economy,” said William Cabangon, president of AAA Securities.
Value turnover reached P14 billion, boosted by foreign buying which amounted to P1.28 billion.
Meanwhile, property developer Ayala Land Inc. said Friday it raised P2.715 billion from the sale of AREIT Inc. shares via an overnight placement of shares.
ALI sold 75 million AREIT shares at P36.20 apiece, the company said in a disclosure to the stock exchange.
The overnight placement, handled by UBS AG Singapore Branch and BPI Capital Corp., was multiple times oversubscribed, given the solid demand from high-quality, long-only institutional investors.
The proceeds from the block sale will be settled on Sept. 24, 2024.
