Local stock market up after Phl Baa2 investment rating

The local stock market on Tuesday gained 11.45 points, or 0.16 percent, to close at 6,973.41 after credit watchdog Moody’s affirmed the Philippines' investment-grade credit rating of "Baa2” with a stable outlook citing the country’s reforms of liberalizing the local economy, fiscal consolidation efforts, and robust macroeconomic fundamentals.

Sectoral indices were mixed, with Services leading the red territory declining by 0.40 percent, followed by Holding Firms down by 0.33 percent, and Banking by 0.5 percent.

Properties and Miners were the only gainers, improving by 2.72 percent and 0.12 percent, respectively.

Philstocks Financial Inc. senior research analyst Japhet Tantiangco linked the sentiment gain to the Fed’s rate-cut cues from the Jackson Hole Economic Symposium.

“Investors cheered the Fed’s dovish signals as monetary policy easing by the Fed would give more room for the BSP [Bangko Sentral ng Pilipinas] to ease their policy too,” he said in a Viber message.

The net market value turnover was P6.49 billion, higher than the year-to-date average of P4.96 billion.

One hundred ten Advancers edged 94 Decliners, while 51 names remained unchanged.

The peso closed at P56.28 from a dollar.

“The PSEi resumed its gains after the continued appreciation of the peso exchange rate appreciated again vs. the US dollar to the strongest in 5 months,” Rizal Commercial Banking Corporation chief economist Michael Ricafort said, further attributing the local bourse gain after the net decline. Treasury bill, Treasury bond, and other local interest rates reduce financing costs of some listed companies that could improve their earnings following the BSP’s -0.25 rate cut.

“The local stock market posted huge gains recently after the peso exchange rate remained among the strongest vs. the US dollar in more than 4.5 months or since March 2024; also after mostly stronger local GDP, employment, bank loans, and other economic data recently, as well as mostly better corporate sales and earnings reports by some listed companies and conglomerates that fundamentally support higher valuations,” Ricafort added.