Market bounces back; telecom firms lead rally

The stock market rebounded Friday following a strong lead from Wall Street and the surprise move of the Bangko Sentral ng Pilipinas to reduce the benchmark interest rate by 50 basis points to an all-time low of 2.25 percent.

The Philippine Stock Exchange Index surged 73.58 points, or 1.2 percent, to 6,191.84 on a value turnover of P5.3 billion. Gainers edged losers, 99 to 91, with 54 issues unchanged.

The Monetary Board, BSP’s policy-making body, said late Wednesday it expects a protracted and uneven global recovery. “Hence, there remains a critical need for continuing measures to bolster economic activity and support financial conditions, especially the effective implementation of interventions to protect human health, boost agricultural productivity and build infrastructure,” it said.

DITO CME Holdings Corp., the third major telecommunications company, advanced 6.1 percent to P3.65, while PLDT Inc., the biggest telecom firm, climbed 5 percent to P1,250.

Globe Telecom Inc., the second-largest telecom, rose 3.5 percent to P2,130, while Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, hospitals and infrastructure, also increased 3.5 percent to P3.80.

The rest of Asian markets bounced back Friday from the previous day’s steep losses, but an increase in infections across the planet is fanning worries about a second wave.

Still, most Asian markets advanced Friday. Tokyo, Sydney, Seoul and Bangkok were all more than one percent higher.

Singapore rose 0.9 percent, Jakarta edged up 0.2 percent and Wellington was marginally higher.

But Hong Kong fell 0.8 percent after the US Senate approved a bill that would lay out sanctions on Chinese officials who undermine the city’s autonomy as Beijing pushes forward with a controversial national security law.   

The bill would allow sanctions against Chinese officials and the Hong Kong police, as well as banks that conduct “significant transactions” with them.

Shanghai was closed for a holiday.

With several US states--particularly Texas, Florida and California―reporting a rebound in cases, there is an increasing sense that leaders will have to stall their economic re-openings and in some cases reimpose containment measures.

And the World Health Organization has raised concerns of a new surge in Europe, where lockdown easing has seen flights between countries resume and bars, restaurants and cinemas reopen.

Regional director Hans Kluge warned that in 11 nations, “accelerated transmission has led to very significant resurgence that if left unchecked will push health systems to the brink once again in Europe.”

However, China, where the disease was first detected late last year, said it had controlled an outbreak in Beijing that had briefly raised fears of a second wave and prompted restrictions.

While investors continued to see the positives, backed up by trillions of dollars in government support, analysts suggested the three-month rally in world equities could be stuttering.

“It seems like we’ve reached a point where as much good news as can be extrapolated has been milked, and investors are finding it hard to see the marginal or incremental new support,” said AxiCorp’s Stephen Innes.

“I’m not suggesting that the stealthy market rally won’t resume, it’s just that investors may need more prominent catalysts. Ideally a vaccine.” With AFP

Topics: stock market , Philippine Stock Exchange Index , Monetary Board , DITO CME Holdings Corp , Bangko Sentral ng Pilipinas , Telecom
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