By Revin Mikhael D. Ochave, A reporter
PHILIPPINE STOCKS ended 2024 on a cautious note following a tumultuous year in the market as the world’s central banks began their easing cycles.
The bellwether Philippine Stock Exchange (PSEi) index fell 0.15% or 10.23 points to close at 6,528.79 on Friday, the last trading day of 2024, while the broader all-share index gained 0.44% or 16.73 points to at 3,748.51. Week by week, the PSEi rose by 1.9% or 122.41 points compared to its close of 6,406.38 in Dec. 20.
Year-to-date, the PSEi was up 1.2% or 78.75 points from its 2023 close of 6,450.04.
The index posted its highest close of 2024 on October 7, ending at 7,554.68. On the other hand, its worst showing this year was its closing of 6,158.48 on June 21.
“We were able to finish the year versus last year, our first annual profit since 2019. It’s a small win, but we won,” said AP Securities, Inc.’s Head of Research. Alfred Benjamin R. Garcia in a Viber message.
“Monetary policy is the main focus this year, as the focus is on interest rates.”
The Bangko Sentral ng Pilipinas in August cut rates for the first time since 2020, lowering the average borrowing cost by 25 basis points (bps). It made two 25-bp cuts at its October and December meetings that brought the policy rate to 5.75%.
Meanwhile, the US central bank began its easing cycle in September with a massive 50-bp rate cut and followed it up with 25-bp cuts in each of its November and December meetings, bringing the fed funds rate to 4.25%-4.5%.
Seven of the world’s 10 largest, developed banks are cutting rates this year, with only Australia and Norway holding back, Reuters reports. Japan, the outlier, is in climbing mode. The Bank of Japan introduced the first rate hike in 17 years in March, ending years of loose policy.
“It was a bittersweet climax to a volatile year marked by steep rallies and corrections as optimism turned to caution,” said Chinabank Capital Corp.’s Managing Director. Juan Paolo E. Colet in a Viber message. “Like the year 2023, this year was also good for investors who were able to trade in and out of major markets.”
Philippine stocks are starting 2024 on a positive note “due to lower inflation and optimism about the start of the rate cut cycle,” said COL Financial Group, Inc. Chief Equity Strategist April Lynn Lee-Tan.
“However, the situation worsened after the release of a weaker-than-expected domestic product in the third quarter, disappointing third-quarter earnings results, and concerns about the impact of Trump’s presidency on the Asian economy,” he said.
Donald J. Trump is expected to be inaugurated as the 47thth The US President on Jan. 20. He has vowed to impose tariffs on goods from China, Mexico, and Canada and to raise tariffs on European Union countries. – with Reuters
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