Philippine stocks may see further volatility this week ahead of the policy meetings of the US Federal Reserve and the Bangko Sentral NG Pipipinas (BSP), as investors look to forward-looking statements.
On Friday, the Philippine Stock Exchange Index (PSEI) rose 1.04% or 61.64 points to end at 5,949.22, while the broader all-share closed at 3,477.68.
On a week-to-week basis, however, the psei fell by 73.02 points from the 6,022.24 close on November 28.
Analysts say that Friday’s Reboard is driven by the Flip Phillight of the Slow Lightline, which strengthens the prospects of the BSP decision.
However, Research Manager of Philstocks, Inc. Jafet Louis O. Tantiangco noted that the psei failed to return above the 6,000 mark.
“It looks like, the market is not ready to take that level as the concern about the local economy is preventing investors’ confidence from building further,” he said in a Viber message.
This week, the focus is on the December 9-10 policy meeting and the December 11 BSP review, it said.
“Prospects of central bank easing may help the market bounce back. However, investors are expected to watch the peso move.” Mr Tantiagco said.
A Businessworld Poll showed that 17 out of 18 analysts expect the reduction of the Philippine Central to bring a reduction of 25 direct points on Thursday (Dec. 11) to bring the policy rate to 4,5%, the lowest since September 2022.
The BSP cut Benchmark borrowing costs by 175 bps as it issued its easing cycle in August 2024. BSP Governor Eli M. Remolona, Jr. Earlier he said that growth opportunities increase the chances of easy travel this week.
For now, interest rate cuts have been cut across the board at this week’s Fed meeting, but a separate committee is playing for the wild card, Reuters reports. Analysts expect a “hawkish cut,” where the language of the statement, moderate forecasts and conference chair Jerome H. Powell Presess Conference Point on the high bar for a higher rate cut.
Mr. Tantiangco added that the market will be waiting for the release of the latest data on foreign investment and the labor survey that could provide more clues to the Philippine economy.
He set the Psei trading range this week from 5,800 to 6,000.
Meanwhile, Rizal Commerce Banking Corp. Economist Michael L. Ricafoort put Psei’s immediate resistance at 6,000 Psychology Mark and the biggest support at 5 785-550.
For its part, online broker 2Tradeasia.com said Holid Liquidity and window dressing could boost market activity. “[Ultimately]We reiterate that this is an era of fickle and irrational spirits,” he said.
It placed Psei immediate support at 5,800 and resistance at 6,000, with secondary resistance at 6,100. – AGC Magno and Reuters
