By means of Revin Mikhael D. Ochave, Reporter
PHILIPPINE STOCKS ended 2024 on a cautious note after a tumultuous year for the market, with many global central banks beginning their monetary easing cycle.
The main Philippine Stock Exchange index (PSEi) fell 0.15% or 10.23 points to close at 6,528.79 on Friday, the last trading day of 2024, while the broader stock index fell 0.44% or 16.73 points rose to 3,748.51. Week on week, the PSEi rose 1.9% or 122.41 points from 6,406.38 points on December 20.
Year on year, the PSEi was 1.2% or 78.75 points higher than the final score of 6,450.04 at the end of 2023.
The index recorded its highest closing price for 2024 on October 7, ending at 7,554.68. On the other hand, the worst performance this year was the June 21 finish of 6,158.48.
“We managed to end the year higher compared to the previous year, our first annual gain since 2019. It’s a small win, but a win nonetheless,” said Alfred Benjamin R. Garcia, head of research at AP Securities, Inc. in a Viber message.
“Monetary policy has been the main driver this year, with an almost laser focus on interest rates.”
The Bangko Sentral ng Pilipinas cut interest rates in August for the first time since 2020, cutting borrowing costs by 25 basis points (bps). During the meetings in October and December, the country made two more cuts of 25 basis points, bringing the policy rate to 5.75%.
Meanwhile, the US central bank started its easing cycle in September with a major 50bp cut and followed it up with 25bp cuts at each meeting in November and December, leaving the fed funds rate at 4.25%-4.5% came.
Seven of the ten major central banks in developed markets have cut interest rates this year, while only Australia and Norway are still concerned, Reuters reports. Japan, the outlier, is in hiking mode. The Bank of Japan made its first rate hike in 17 years in March, ending years of ultra-loose policy.
“It was a bittersweet culmination of a volatile year marked by steep rallies and corrections as hope turned to caution,” Juan Paolo E. Colet, managing director of Chinabank Capital Corp., added in a Viber message. “Like 2023, this year once again proved to be quite good for investors who were able to trade in and out of the big market waves.”
Philippine stocks started 2024 on a positive note “due to declining inflation and optimism about the start of the rate cut cycle,” COL Financial Group, Inc. said. Chief Equity Strategist April Lynn Lee-Tan.
“However, sentiment turned negative following the release of weaker-than-expected third-quarter gross domestic product, disappointing third-quarter earnings results and concerns about the impact of a Trump presidency on Asian economies,” she said.
Donald J. Trump will be inaugurated as the 47the The American president on January 20. He has promised to impose steep tariffs on goods from China, Mexico and Canada and to raise duties on European Union countries. — of Reuters