The local financial markets sent mixed signals to investors as the new year began, with the Philippine Stock Exchange index (PSEi) climbing slightly higher while the peso slipped against the US dollar, setting the stage for a potentially volatile 2025.
The peso began the year with a slight depreciation against the US dollar, closing at P57.91 per dollar on Thursday, Jan. 2, from the year-end close of P57.845.
Despite opening at P57.9, the local currency experienced some volatility throughout the day, reaching a high of P58.04 and a low of P57.78. Trading volume remained strong at $1.195 billion.
Michael Ricafort, Rizal Commercial Banking Corporation (RCBC) chief economist, said the slight weakening can be attributed to the conclusion of the holiday season.
He also noted the recent strengthening of the US dollar against major global and Asian currencies as a contributing factor.
Despite the slight uptick, Ricafort said the peso remains relatively strong as it has improved by P1.09 from the record-high closing rate of 59 reached on Dec. 19, 2024.
In contrast, the local bourse started the year with a positive showing, gaining 21.60 points, or 0.33 percent, to close at 6,550.39. This upward trend came despite mixed trading across sectors, with Banks and Services leading the gains while Mining and Oil lagged.
Market sentiment was optimistic, with PSE President and Chief Executive Officer Ramon S. Monzon expressing hopes for "a more robust trading year and better capital raising performance" during the traditional bell-ringing ceremony.
Regina Capital Development Corporation Managing Director Luis Limlingan echoed this sentiment, attributing the PSEi's gains to market anticipation for the year ahead.
However, trading volume remained relatively thin, with 1.11 billion shares valued at P3.24 billion changing hands.
Looking ahead, investors will be keeping a close eye on key economic data releases this week, including the ISM Manufacturing Index due on Friday.
Additionally, market participants will be paying attention to a scheduled speech by Richmond Fed President Thomas Barkin on the same day, which could provide insights into the US Federal Reserve's monetary policy outlook.
Philstocks Fianncial Research Manager Japhet Tantiangco said "The market closed its first trading day of the year on a positive note on the back of last minute bargain hunting. "
He noted that, "The improvements in the Peso’s position against the US Dollar helped in the climb. Foreign transactions posted net inflows amounting to P217.72 million which aided this Thursday."