INVESTORS remain positive on Ayala-led Bank of the Philippine Islands (BPI) as it stands to benefit from rising borrowing costs.
Data from the Philippine Stock Exchange showed a total of P1.887 billion worth of 19.340 million BPI shares were traded from May 30 to June 3, making it the ninth most actively traded issue that week.
Shares in the fourth-largest universal and commercial bank in terms of total assets finished at P95.00 apiece on Friday, down 0.6% week on week from the P95.60 close on May 27. BPI has gained 4.3% since the P91.05 finish on the first trading day of the year.
Analysts said banks like BPI could see higher revenue after the Bangko Sentral ng Pilipinas (BSP) last month hiked benchmark rates for the first time since November 2018 by 25 basis points (bps).
The central bank increased borrowing costs to combat rising inflationary pressures brought by higher fuel and food costs.
In April, the consumer price index rose by 4.9% year on year, already above the central bank鈥檚 2-4% target range and the revised 4.6% forecast this year.
BSP also signaled another 25-bp hike in benchmark interest rates at its next policy review on June 23.
Currently, the overnight reverse repurchase rate is 2.25%, while overnight deposit and lending rates are 1.75% and 2.75%, respectively.
鈥淏PI stands to gain as interest income is the main growth driver after first-quarter earnings was released last month,鈥 Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a mobile phone message on Friday.
Mercantile Securities Corp. Analyst Jeff Radley C. See said in a Viber message that although the sentiment of the market is not that good, 鈥渕ovements in the financial sector especially on the top 3 banks looks bullish due to the increase in rates by the BSP.鈥
鈥淚nvestors are still in a wait-and-see scenario as they await for the new [Philippine] president at the end of June,鈥 he added.
In the first quarter, BPI鈥檚 attributable net income rose by 59.6% year on year to P7.984 billion.
Its net interest income went up 12.7% annually to P18.99 billion in the January-March period. Impairment losses also thinned by 30.6% to P2.5 billion from P3.6 billion a year ago.
鈥淲e expect BPI to go on sideways after moving up this week with a near-term support of P92.00 per share and a resistance at P98.80 per share with general market outlook remains at negative,鈥 Mr. Pangan said.
Mr. See placed BPI鈥檚 support levels this week at P93.00 and P89.00, while resistance levels at P99.70 and P104.00. 鈥 L.O. Pilar
