MANILA - Shares opened higher, while the peso was stronger against the dollar on Monday, on continued relief after the Federal Reserve signaled no change in the pace of interest rate increases.
The Philippine Stock Exchange Index was up 0.25 percent to 7,362.98. The peso opened at P50.15 to the dollar from P50.18 on Friday.
Domestic liquidity is strong, supported by local investors, even as foreign funds, seeking higher yields, have started to pull out, said Security Bank vice president Eduardo Olbes.
“In the case of domestic investors, there is no change, fundamentally confident with the direction of the economy and willing to support it,” Olbes told ANC’s “Market Edge with Cathy Yang.”
Olbes said the peso would trade between P50 to P52 to the dollar this year unless the Federal Reserve signals a change in its tightening pace.
The Federal Reserve signaled at least two more increases after a 25-basis point adjustment in overnight borrowing rates last week, bringing relief to financial markets, which had feared as many as four rate hikes this year.
MSCI's broadest index of Asia-Pacific shares outside Japan was fractionally lower. Japan is closed for a holiday.
On Friday, Wall Street was flat to negative, dragged lower by bank shares that fell along with Treasury yields.