A Philippine country-specific exchange traded fund stood out among the other flagging markets Friday as ease monetary policy and rolling back lockdown measures fueled bets of a rebounding economy.
The iShares MSCI Philippines ETF (NYSEArca: EPHE) was among the best performing non-leveraged ETFs of Friday, rising 2.8%.
Philippine stocks increased by the most in two months on the central bank’s looser reserve requirement rules and more relaxed lockdown restrictions in the capital region.
“The relaxation in the reserve requirement ratio and the lifting of the lockdown invited back some funds on bets these could mitigate the recession,” Manny Cruz, a strategist at Papa Securities Corp., told Bloomberg. “Some foreign funds seized the opportunity and scooped up shares that were being unloaded toward the close of trading to reflect MSCI changes that will take effect today.”
The government will be rolling back quarantine measures in Metro Manila next week. The reopening economy would allow increased movement for workers and goods as a business is set to resume in more sectors and industries.
“The market went up as investors seem to be optimistic over the anticipated gradual easing of lockdown measures in Metro Manila and other major cities of the country,” Timson Securities, Inc. Trader Darren T. Pangan told BusinessWorld.
Meanwhile, the looser central bank monetary policy should help bolster economic growth.
“The central bank action will benefit financial institutions, borrowers and the economy for this is a form of stimulus,” Astro del Castillo, managing director at First Grade Holdings Inc., told Bloomberg.
However, many remain “skeptical and wary” for fear of ongoing infections. The Health Department reported this week the highest number of new coronavirus or COVID-19 cases in a single day in over a month, rising to 350 new cases Tuesday, the highest number since April 6.
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