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Philippine shares soar 3 percent on low September inflation, rate cut hopes

Philippine shares soar 3 percent on low September inflation, rate cut hopes

Philippine shares soared Thursday after three days of losses on favorable September inflation data, which spurred hopes that the Central Bank may soon ease monetary policy to fuel economic activity next year.
The benchmark 30-company Philippine Stock Exchange Index advanced 3 percent to 2,561.06, after shedding 2.7 percent since Monday, including a 1.4 percent drop on Wednesday.
"The positive surprise from the (inflation) data is the main catalyst for the gains in shares, and we believe this is sustainable," said Fitzgerald Aclan, assistance vice president of Banco de Oro.
Earlier Thursday, the government said the September inflation rate was the lowest in more than two years. Consumer prices rose 5.7 percent on the year, their most modest rise since a 5.4 percent on-year increase in June 2004, the National Statistics Office reported.
The Central Bank projected the inflation rate for last month at between 5.7 percent and 6.4 percent on account of lower oil prices and a stronger peso.
AB Capital Securities research director Jose Vistan said the latest inflation report was certain to heighten expectations that the Central Bank will move to cut key overnight rates.
"The inflation data, combined with the strength of the peso, I think, sort of seals the deal for a rate cut on the part of the Central Bank to help boost the economy next year," said Vistan.
The Central Bank has kept its key overnight borrowing and lending rates steady at 7.5 percent and 9.75 percent respectively, since October last year, when it raised both by 25 basis points.
Among the most actively traded stocks, Globe Telecom rose 9 percent at 1,155 pesos, Manila Electric was up 6.3 percent at 21.25 pesos and Jolibee Foods gained 5.75 percent at 37 pesos.
The peso fell slightly against the U.S. dollar Thursday. The dollar closed at 50.020 pesos, up from 50.010 pesos Wednesday.


Updated : 2021-04-19 12:19 GMT+08:00