MANILA, Philippines — Local equities edged up along with other Asian bourses after a deal to cover the failing Silicon Valley Bank’s deposits and loans brought some stability to markets worried about a crisis in the global banking system.
The benchmark Philippine Stock Exchange index (PSEi) closed 0.12 percent or 8.12 points higher at 6,603.15 yesterday, while the broader All Shares index gained 0.16 percent or 5.79 points to 3,519.86.
“Philippine shares reclaimed their position above 6,600 as traders digested a few positive news reports, including First Citizens BancShares’ agreement to buy large parts of Silicon Valley Bank,” Luis Limlingan of Regina Capital said.
Rizal Commercial Banking Corp. chief economist Michael Ricafort shared the same sentiment with Limlingan.
“First Citizens Bank & Trust agreed to buy all the deposits and loans of Silicon Valley Bank, somewhat easing recent market concerns; a deal that includes the purchase of about $72 billion SVB assets at a discount of $16.5 billion,” Ricafort said.
Claire Alviar of Philstocks Financials also attributed yesterday’s gain to the easing of banking fears.
“The local bourse showed an 8.12 points or 0.12 percent gain to reach 6,603.15, thanks to the easing of banking fears after First Citizens BancShares purchased a large portion of Silicon Valley Bank; nevertheless, the net market value turnover was recorded at only P4.98 billion, higher than yesterday, but lower than the month’s average, indicating weak market conviction,”Alviar said.
She said that most investors remained cautious while monitoring the banking sector.
A total of 62,176 trades valued at P5.34 billion were made yesterday. Declines outnumbered advances, 95 to 78, while 41 issues were unchanged.
“The upbeat sentiment across Asian markets is mainly attributed to the stabilization of the US and European banking industry,” said Glenn Yin, head of research and analysis at AETOS Capital Group.
The concerns, however, haven’t completely gone away as US Federal Reserve Governor Philip Jefferson said that stress among small banks could hit small businesses hardest.