MANILA – The Philippines’ main equities index ended 2020 on a positive note partly on the latest stimulus package of the US government and the peso followed, due also to the timely signing of the 2021 national budget.
Philippine Stock Exchange index (PSEi) inched up by 0.25 percent, or 17.46 points, to 7,139.71 points.
All Shares followed with a jump of 0.43 percent, or 18.34 points, to 4,272.61 points.
Most of the sectoral gauges also ended the year with gains, led by the Mining and Oil, which rose by 3.16 percent.
Industrial posted an uptick of 1.54 percent, Financials by 0.62 percent, and Holding Firms by 0.42 percent.
On the other hand, Property declined by 0.59 percent and Services by 0.14 percent.
Volume totaled by 95.98 billion shares amounting to PHP11.11 billion.
Losers surpassed gainers at 122 to 119 while 36 shares were unchanged.
Luis Limlingan, Regina Capital Development Corporation head of sales, said investors’ optimism was partly driven by the recent signing of the USD900 billion relief package in the US and some window dressing in the local bourse.
On the other hand, he said oil prices slipped due to weak demand and the possibility of higher output by Organization of the Petroleum Exporting Countries Plus (OPEC+).
Prices of Brent crude lost around 0.84 percent to USD50.86 per barrel and price of West Texas Intermediate dropped by 1.26 percent to around USD47.62 per barrel, he added.
The peso also ended the year at 48.023 against the US dollar, its strongest since its 47.99 close on September 23, 2016. It finished Monday at 48.055.
It opened the day at 48.04 and traded between 48.27 and 48.011. Average level for the day stood at 48.021.
Volume totaled to USD731.25 million, higher than the USD507.38 million a day ago.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort attributed the peso’s strength to “expectations of some accumulated OFW (overseas Filipino workers) remittances and conversion to pesos ahead of the upcoming long New Year holiday weekend.”
Drop in the number of domestic coronavirus disease (Covid-19) infections to below 1,000 along with the signing by President Rodrigo R. Duterte of the PHP4.5 trillion 2021 national budget on Monday also supported the peso, with the latter aimed at “increased government spending especially on infrastructure that leads to better economic recovery prospects.”
Other factors that backed the local currency during the day include the balance of payment (BOP) surplus, which amounts to around USD11.79 billion as of last November; the net foreign portfolio investments; and the global market sentiment, which currently is up due to latest relief package in the US.
Ricafort said the peso has appreciated by 5.2 percent, or about PHP2.612, this year after ending 2019 at PHP50.635.
There will be no trading from Wednesday to Friday this week due to the Rizal Day, December 30, and New Year holidays.
Ricafort forecasts the peso to trade between 47.95-48.09 to a dollar next week, with the projected range on Monday between 47.98-48.05.
“For 2021, the US dollar/peso could range at 49 levels, if the economy and imports continue to recover/pick up further, especially if new Covid-19 local cases ease further especially if the Covid-19 vaccines are deployed/rolled out in the latter part of 2021, thereby allowing/justifying measures to further reopen the economy and improving economic recovery prospects,” he added. (PNA)
