Equities 3 MIN READ

Stock Market Weekly: Sideways trading with an upward bias

Investors will be watching out for data on bank lending, trends in manufacturing, and updates on the cabinet and economic plans of president-elect Ferdinand “Bongbong” Marcos Jr.

May 30, 2022By First Metro Securities Research


 The Philippine Stock Exchange index (PSEi) ended at 6,726.14, 20.19 points lower than the previous week’s close, or down by 0.3% week-on-week. Investors’ worries on inflation and the global economy were offset by positive investor sentiment in the US markets which was driven by strong corporate earnings releases. Locally, investors continued to take a wait-and-see approach as the incoming administration has yet to lay down its economic plans following announcements of would-be cabinet secretaries of president-elect Ferdinand “Bongbong” Marcos Jr. 

 Top index performers were Aboitiz Equity Ventures (AEV) which was up 6.2%, International Container Terminal Services Inc. (ICT) up 6.0%, and Monde Nissin (MONDE) up 4.4%, while index laggards were Converge Information Communications Technology Inc. (CNVRG) down by 5.5%, JG Summit Holdings Inc. (JGS) down by 5.3%, and Emperador Inc. (EMP) down by 4.1%. The index breadth was negative with nine gainers versus 20 losers. Average daily turnover value was PHP 5.9 billion. Foreigners were net sellers by PHP 9.8 billion. 


The market is expected to trade sideways with an upward bias as investors await new developments on president-elect Ferdinand “Bongbong” Marcos Jr.’s appointments and economic plans. Moreover, investors will be closely watching data on bank lending in the Philippines as well as the US and Philippine manufacturing Purchasing Managers Index (PMI) for May 2022 as they look for signs of strengthening economic recovery. 


Converge ICT Solutions, Inc. (CNVRG) — BUY 

CNVRG has approved a share buyback program to acquire up to approximately PHP 6.5 billion from Coherent Cloud Investments (an affiliate of Warburg Pincus), effectively increasing the public float to 30% from 26%. The share buyback program shows that the company believes that the stock is undervalued and is confident of its prospects. CNVRG will also be added to the MSCI PH Standard Index by the close of May 31, 2022, providing a catalyst for possible short-term price appreciation. Accumulating CNVRG at current prices and on pullbacks to PHP 25 is advisable. Set stop limit orders below PHP 24 to protect capital. Take profit at PHP 29.50 to PHP 31 for short-term traders, and PHP 41 for long-term investors. 

First Gen Corp. (FGEN) — BUY 

The stock is currently trading at oversold levels which historically has shown that its share price tends to rebound by more than 10% within a month. Given this, investors or aggressive bargain hunters can take advantage of the stock trading at oversold levels to ride the probable bounce. Accumulating FGEN at current levels is advisable. Set stop limit orders below PHP 18.60 to protect capital. Take profit at around PHP 21.50/PHP 22.00. 

Solar Philippines Nueva Ecija Corp. (SPNEC) — BUY 

The stock is attempting to break out of its downtrend as momentum is turning bullish. Solar PH recently secured over 10,000 hectares of land in Batangas, Nueva Ecija, and Tarlac which will soon be developed into solar energy zones. To fund the remainder of its projects, Solar PH plans to enter into joint ventures with partners. It may also raise more capital, including a possible stock rights offering, in June 2022. Accumulating SPNEC once the share price breaks above PHP 1.85 is advisable. Set stop limit orders below PHP 1.74 to protect capital. Take profit at around PHP 2.08/PHP 2.20. 


Resistance: 6,800 / 7,200 

Support: 6,400 / 6,180  

The PSEi managed to stay above the 6,700 level for the second straight week.  

Technical indicators are less negative and moving towards neutral. The index may attempt to break out of the immediate 6,800 resistance. A successful breakout will likely result in a retest of the next resistance level at 7,200. 


Continue setting stop limit orders especially below 6,400 to protect capital. Support levels are currently at 6,400/6,180.  


Tuesday, May 31, 2022 |
– Bank lending net of reverse repurchase rates (RRPs) year-on-year for April 2022 (8.9% in March 2022) 

Wednesday, June 1, 2022
– US manufacturing PMI for May 2022 (57.5 preliminary reading)
– PH manufacturing PMI for May 2022 (54.3 in April 2022) 

Friday, June 3, 2022
– US change in nonfarm payrolls for May 2022 (329,000 est., 428,000 in April 2022) 

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Currencies 4 MIN READ

Why buy the dollar on dips

A broader economic reopening, more aggressive US Fed tightening, higher commodity prices, and other factors all point to a stronger US dollar up ahead.

May 30, 2022By Patty Membrebe

On May 26 last year, the peso was at around PHP 48.15 to the dollar. Owing to a host of factors, it has since weakened over 8% year-on-year, closing at 52.40 yesterday against the greenback. 

For those of you who have funds for investing in foreign exchange, or those with dollar requirements for your businesses, this presents a good opportunity to maximize investments. Our advice is to buy dollars on dips, meaning you buy when the dollar dips in price because, we believe, this is only temporary and it is likely to increase in value soon. 

We see three fundamental drivers that will push the dollar higher in the medium term: 1) a more aggressive tightening from the US Federal Reserve, 2) a wider current account deficit in the Philippines, and 3) continued ramping up of infrastructure spending. Metrobank Research forecasts the dollar to reach PHP 53.40 in 2022 and PHP 54.70 in 2023. 

Let’s take a closer look at these catalysts affecting the value of the dollar. 

More aggressive tightening from the Fed 

With US inflation reaching 40-year highs, increasing payrolls, and the unemployment rate almost back to pre-pandemic levels, markets now expect a total of eleven 25-basis-point (bp) hikes by the US central bank for the whole of 2022—an increase from last month’s nine 25-basis-point hikes priced-in.  

With the prospect of an accelerated tightening of monetary policy in the US and, in turn, a faster rise in interest rates, the US dollar has also seen a broad-based strengthening against major currencies as it touched 20-year highs earlier this month.  

As the Fed is poised to front-load rate hikes and reduce the balance sheet this year to re-anchor long-term inflation expectations, this has raised the risk of a stagflation, or even a recession, i.e., a “hard landing”. 

Aside from concerns over a protracted economic slowdown in the US, a myriad of global risks stemming from the Russia-Ukraine war and COVID lockdowns in China have led investors to seek safe-haven assets such as the dollar. As these issues are expected to linger in the near-term and as more investors veer away from risk, we expect the dollar to stay supported.  

Locally, the Philippine economy has turned a corner, successfully beating growth expectations for the past four quarters. Gross Domestic Product (GDP) for the first quarter of 2022 came in at 8.3% year-on-year, versus the consensus forecast of 6.8%. It was this growth that led to an earlier rate hike by the Bangko Sentral ng Pilipinas (BSP), a departure from its previous guidance of a possible rate hike in June.   

As widely expected, the BSP delivered a 25-basis-point increase in the overnight lending rate to 2% on May 19. After the policy rate decision, the USD/PHP continues to trade within recent ranges, with quick dips closer to 52.10 remaining supported by dollar demand from companies.  

However, players still appear to be wary of holding on to bullish peso positions as buying interest will fade as the dollar moves closer to 52.50. Real rates in the Philippines, or the key interest rate minus inflation, are still in negative territory. This is likely to weigh on the peso for most of the year.  

Wider current account deficit 

Import growth continues to outpace export growth due to the elevated prices of global commodities. As a result, importers are faced with higher dollar bills for the same volume of goods. As a net importing country, the Philippines is generally a price-taker. High commodity prices, especially those of oil and energy, do not bode well for the peso.   

We expect that a broader global reopening in the coming years will lead to a widening of the country’s trade deficit, which, in turn, is supportive of USD/PHP strength. The BSP has also revised its forecast for the country’s current account, which it now sees reaching a deficit of USD 16.3 billion this year, or 3.8% of GDP, from its previous expectation of USD 9.9 billion, equivalent to 2.3% of GDP. For 2023, the BSP sees only a slight narrowing of this current account deficit to 3.7% of GDP.  

Continued infrastructure spending 

Another fundamental driver that not only supports a big pick-up in imports, but also points to a more sustainable revival of demand in a rebounding economy, is investment growth. The latest GDP print showed a promising surge in investments, which jumped by 20%. Meanwhile, infrastructure spending for the first quarter of 2022 also rose 4% despite the ban on public works before the May 9 elections. 

This is part of the government’s “Build, Build, Build” program, which has led to an increase in the importation of capital goods. The outgoing administration has been in catch-up mode with its ambitious pipeline of big-ticket projects, for which construction has been derailed by the pandemic. Incoming President Bongbong Marcos Jr., however, has expressed his intent to build on the successes of the infrastructure program.   

There remains a bigger chunk of the flagship projects yet to be completed in 2022 and beyond, and a sustained economic reopening is set to facilitate this headwind. That said, “Build, Build, Build” is one strong factor that supports our bullish view for USD/PHP through the next couple of years, as the importation of capital goods and raw materials and, in turn, dollar demand, would have to ramp up.  

Why buy now 

Looking ahead, we are likely to see the USD/PHP spot rate to continue trading within the 52.30 to 52.50 range in the coming days, so long as risk sentiment remains stable. To the downside, 52.30 should serve as strong technical support ahead of the 52.20 level. 

On the other hand, selling interest ahead of 52.45 to 52.50 is expected to persist amid relatively light real demand, and the continued presence of local supply at 52.50.   

At current levels, those with dollar requirements may find it strategic to buy closer to 52.30 or to hedge importations in view of further peso depreciation from here.  


PATTY MEMBREBE is a Financial Markets Analyst at Metrobank – Institutional Investors Coverage Division, under the Market Strategy and Advisory Section. She communicates strategies on fixed income, rates, and portfolio solutions for our high-net-worth individual and institutional clients. She holds an AB Economics degree from Ateneo de Manila University and is currently pursuing graduate studies. On her free time, she enjoys watching indie films and watching gigs to support local indie music.

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Rates & Bonds 2 MIN READ

Why it’s important to keep an eye on peso government securities

Know when you need more government securities in your investment portfolio.

May 25, 2022By Athalia Lim

With our pandemic-battered economy, the government had to ramp up its spending in the past two years in order to make up for the decline in economic activity. 

This meant more borrowing through the offer of government bonds or government securities (GS). These fixed income securities have an important role for investors with a sizeable portfolio. It can contribute to capital preservation as it provides reliable income and some resilience if the stock markets become volatile. 

In June 2021, the Bureau of the Treasury (BTr) decided to increase its Fixed Rate Treasury Note (FXTN) auction size from PHP 70 billion to around PHP 140 billion monthly in June 2021. 

From there, the BTr has been issuing PHP 35 billion worth of FXTNs every week, whenever they are able to get enough bids for a full or partial award. 

Although growth concerns and unorthodox tools from the Bangko Sentral ng Pilipinas (BSP) have supported GS yields for most of the last two years, the peso yield curve ultimately bear-steepened, i.e., long-term yields rose faster than short-term yields, because of this supply pressure. Bear steepening happens when markets sell their holdings of long-term bonds in anticipation of higher inflation and more government borrowing. 

In the BTr’s last couple of FXTN offerings, supply pressure has dampened demand for peso GS. The BTr is seen aggressively awarding its issuances at levels that are as much as 40 basis points (bps) higher than the last dealt level. 

This led to defensiveness in bids, as players were unwilling to take on huge GS positions. As such, it would be more difficult for investors with existing positions in the affected tenors to sell their bonds at favorable levels. 

We expect the BTr to continue saturating 3- to 10-year bonds with additional supply, posing further upward risk on GS yields in these tenors. Moreover, since the economic policies of the new administration have yet to be laid out, the BTr may continue aggressively awarding their offerings while the key policy rate, or interest rate set by the BSP, is still low. 

So what should you do? On the one hand, we advise trading clients to keep their 3-to-10-year bond positions light. On the other hand, hold-to-maturity clients may strategically buy 7- to 10-year bonds above the 6% key level. That’s because they provide significant returns that will still perform better than historical figures even if the BSP hikes rates several times. 

Still, it would be prudent to monitor your bond portfolio to maximize returns and preserve capital. A call to your investment specialist may be a good idea.  


ATHALIA LIM is a trader from Metrobank’s Treasury Group – Government Securities Trading Department (GSTD). She is a graduate of Metrobank’s Financial Markets Sector Training Program and has completed her Business Economics degree from the University of the Philippines. 

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Equities 3 MIN READ

Stock Market Weekly: Sideways Trading Ahead

Investors continue to be on the lookout as more earnings reports from US retailers are released this week. Locally, the spread of a COVID-19 Omicron sub variant is closely being monitored.

May 23, 2022By First Metro Securities Research


The Philippine Stock Exchange index (PSEi) closed 367.16 points higher at 6,746.33, up 5.76% week-on-week. Our local bourse rose along with Asian peers following China’s slashing of its five-year loan prime rate by 15 basis points (bps) to 4.55%.  

Positive sentiment in the US markets likewise spilled over to local investors. The PSEi enjoyed a three-day win streak early in the early part of the week, with foreign net buying returning for the first time in eight sessions on Wednesday.  

Profit taking ensued on Thursday due to a decline on Wall Street amid global stagflation concerns. The local market ended in the green on Friday following the BSP’s raising of interest rates by 25 bps to 2.25%, a move expected by 14 out of 21 economists surveyed by Bloomberg. 

Top index performers were Globe Telecom (GLO) which was up by 13.9%; AC Energy Corporation (ACEN), up by 13.3%; and Monde Nissin Corporation (MONDE), up by 11.3%. Index laggards were Alliance Global Group Inc. (AGI), down by 5.7%; and Emperador Inc. (EMP), down by 3.2%. The index breadth was positive with 28 gainers versus two losers. The average daily turnover value was PHP 7.2 billion. Foreigners were net sellers amounting to PHP 515 million. 


The market is expected to trade sideways. Investors may remain on the sidelines as they await more earnings reports from US retailers, who may exhibit the effects of inflation and supply chain disruptions on the economy. Investors will also watch out for the second reading of the US annualized first quarter 2022 GDP and the Federal Open Market Committee’s (FOMC’s) minutes of the meeting on Thursday. On the local front, investors will be monitoring the developments of the COVID-19 Omicron sub-variant BA.4 which is considered a “variant of concern”, and the local transmission of the more transmissible BA.2.12.1. 


1) DMCI Holdings, Inc. (DMC) — BUY 

Semirara Mining and Power Corp. (SCC), DMCI Power, and DMCI Mining are expected to sustain their earnings growth this year as coal sales volume and energy prices remain elevated due to the ongoing global supply disruptions and surge in demand. For DMCI Homes, management expects sales to improve and cancellations to taper as the economy recovers. DMC’s share price managed to stay above key support levels despite ongoing market volatility. Accumulating DMC shares from PHP 8.10 to PHP 7.90 is advisable. Set cut loss below PHP 7.55. Take profit at around PHP 9.00/PHP 9.50.  

2) Bloomberry Resorts Corp. (BLOOM) — BUY 

Casino operators, especially Bloomberry, are poised to benefit from the policy that allows vaccinated foreigners to enter the Philippines. Similarly, the low cases in Metro Manila allow Bloomberry to resume activities to full capacity for as long as the company complies with minimum health standards. Its share price is looking to retest its resistance level after bouncing off its recent support price. Accumulating shares once the stock breaks above PHP 6.80 is advisable. Set stop limit orders below PHP 6.30. Take profit at around PHP 7.80 to PHP 8.00. 

3) Metro Pacific Investments Corp. (MPI) — BUY 

Manila Electric Co. (MER) emphasized that its sales volume growth target is between 5 – 6% this year, assuming restrictions will not be tightened. As for the toll segment, management said that traffic volume in April 2022 for some of its toll locations has already exceeded the volume in April 2019. Management added that they are hopeful that their pending toll rate hike applications for the Cavite Expressway (Cavitex), North Luzon Expressway (NLEX), and Subic-Clar-Tarlac Expressway (SCTEX) will be approved in May 2022. As for the water business, Maynilad Water Services, Inc. (Maynilad) expects water supply to further improve in the second quarter of 2022 amid the start of the La Niña season. MPI’s share price is still trading sideways. Accumulating MPI shares once it breaks above the PHP 4.00 resistance is advisable. Set cut loss below PHP 3.65. Take profit at around PHP 4.50/PHP 4.60.  


Resistance: 6,800 / 7,200 

Support: 6,400 / 6,180  

The PSEi rebounded as expected amid a technical bounce after the market hovered at oversold levels for the first time since January 2021. The PSEi may attempt to break above its resistance level of 6,800, the 100-day, and 200-day moving averages (MAs). However, it is still not out of the woods. A break above 6,800 will likely result in a retest of the 7,200 levels. Failure to break out may lead to a pullback to 6,400. 


Continue setting stop limit orders, especially below 6,400 to protect capital. Support levels are currently at 6,400/6,180. 


Thursday, May 26, 2022
– US second reading of GDP annualised quarter-on-quarter for 1Q2022 (-1.3% est., -1.4% on first reading)
– FOMC minutes of the meeting 

Friday, May 27, 2022
– Corporate Earnings: Alliance Global Group, Inc. (AGI) 

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Investment Tips 4 MIN READ

Active vs. Passive Investing: Which is best for you?

One is not necessarily better than the other. Find out the pros and cons, the virtues and shortcomings of passive and active investing.

May 23, 2022By Daniel Andrew Tan

The debate between active and passive investing has been going on for quite a while now, with strong advocates on either side. However, despite the strong opinions and many arguments within the financial community, these terms may sound foreign to many.

So what do they mean, really? Let’s talk about the mindset behind each strategy, their pros and cons, and how and when to apply them.

Just keep in mind that while the discussion on active vs passive discussion happens mostly in the equities space, these concepts apply to fixed income, i.e., bonds, and other asset classes as well. 

Active Investing

Put simply, an active approach to investing involves monitoring prices of investment positions to “actively” buy or sell to maximize gains and minimize losses. Active investing can be done by the individual investors themselves, or portfolio managers who can do the work for them for a fee.

The goal of every active fund is to beat the benchmark for its asset class. Because of this, active fund performance is measured by how much better or worse they perform relative to the market. This excess return above the benchmark is known as alpha.

To achieve high alpha, active investors generally apply a combination of analytical tools, market expertise, experience, and even “gut feel” in order to make the best possible investment decision at that point in time. This is a more involved process and entails frequent trading and continuous monitoring of the portfolio, thus it naturally comes at a higher cost vs. passive investing. 

Passive Investing

Known also as “index investing” or indexing, passive investing mainly involves buying into index funds or exchange-traded fund (ETFs) with the goal of matching the performance of the chosen index or benchmark. This is a more hands-free approach with less frequent monitoring and trading.

The main philosophy driving passive investors is called the efficient market hypothesis, which states that markets are efficient and shares are always fairly priced because they reflect all information available to investors at any given time. According to the theory, consistent alpha generation, or consistently beating the benchmark, is impossible.

What approach is better, and when?

One popular proponent of passive investing is Warren Buffett, CEO of Berkshire Hathaway and currently one of the five richest people in the world. If you think about it, it seems ironic since he runs a business managing active investments.

Why is that so? What’s the difference? Simply put, it’s about time and experience.

Mr. Buffett’s advice is directed toward the average investor, for whom it is widely accepted that a passive portfolio works best over the long term. Statistics support this as well. Nearly 80% of actively managed US equity funds do not manage to outperform their respective benchmarks. A passive portfolio requires minimal expertise and less time spent monitoring the portfolio as indices typically only have quarterly “rebalancing” or adjustment periods to reflect intended changes in its composition.

Active portfolios, however, do have their own merits. At peak levels, active funds have been known to post year-on-year gains well above the benchmark. Due to their nature, active funds can also react more swiftly to changes in market conditions, especially in highly volatile periods.  As stated earlier, this more hands-on approach also entails higher fees, which may cut any gains you may have.

Here’s a brief summary of the benefits and disadvantages of each approach:


Despite the comparisons between the two, it’s always best to remember that you don’t have to pick just one or the other. While some would prefer to stick to a single investment strategy, there are many portfolios that have both active and passive components. The active portion provides the opportunity to achieve high returns, while the passive portion grants stability and steady returns over the longer term.

Whatever strategy you decide on, I personally believe there is no wrong choice. Be it active or passive, bonds or equities, simple or complex, the key word here is “investment”. We invest to grow our wealth to enhance or preserve our quality of life. The means may vary, but the goal has always remained the same.

To quote the famous economist Benjamin Graham: “The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.”


DANIEL ANDREW TAN is a Relationship Manager for Metrobank’s Private Wealth Division, whose function mainly involves providing investment and wealth management advice to the Ultra-High-Net-Worth Individuals (UHNWI). He brings with him over fifteen years of experience in both retail banking and financial markets, and avidly monitors Philippine equities. He applies both active and passive investment strategies to his personal portfolio and strongly advocates for a “tailored” approach to investments.

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Fine Living 3 MIN READ

Mindfulness for leaders

You may think it’s just a fleeting fad. Mindfulness, however, has been scientifically proven to be beneficial for most people.

May 20, 2022By Judy Capili

As professionals and business owners, we all lead busy lives. The day starts with an alarm to signal the beginning of the frenzy and chaos, a day filled with meetings to preside over, projects to manage, and decisions to make. No wonder we’re stressed and burned out.

Do you know that mindfulness can help you manage the stresses of a hectic lifestyle? Numerous studies have shown that mindfulness can promote physical, mental, and emotional well-being and health.

What is mindfulness? It is our ability to be aware of the present and pay attention to what is happening without judgment. Mindfulness can be developed through meditation, a mental training to embrace our moment-to-moment experience in a relaxed and gentle way.

The awareness and compassion we cultivate help us see things clearly just as they are, and respond more skillfully to situations. As Holocaust survivor Viktor Frankl says: “Between the stimulus and response, there is a space. In that space is our power to choose our response.”

Benefits of Mindfulness

We become calmer and less stressed. Mindfulness can support us to respond, rather than react, to challenges and crises with calmness and composure. It gives us a chance to pause and take a step back before our next move.

We gain clarity and focus. When the mind is calm through mindfulness meditation, the lens through which we see the world becomes clearer. Instead of acting purely on impulse, we can recognize things as they really are and experience life in all its fullness and truest nature.

We can be kinder and better leaders. Studies have shown that mindfulness meditation can help us become kinder and more compassionate. When we sit still, we create space to honor what we have in common with other human beings. We can become more effective leaders for our team members.

How can we be more mindful? 

  1. Observe purposeful pauses throughout the day. Enjoy small pauses in between meetings in order to breathe, focus, and gather your attention. Mindfully “arrive” in the meeting, decide on your purpose, and lead meetings in a more productive way.
  2. Practice mindful movements. Mindful movement helps us get in touch with our body, release tension, mobilize stagnant energy and even lift our mood. Try to do some mindful movements throughout your day. Do some shoulder and neck rolls every hour. Shift in your seat often. Maybe you can stand or even walk around in between meetings.
  1. Try to focus on one thing at a time. New studies reveal that multitasking reduces our performance because our brains can only focus on one thing at a time. Renowned Zen Master Sunryu Suzuki, in his book Beginner’s Mind, introduced the Japanese secret to productivity called Ichigyo-Zammai which means “full concentration on a single act.” Suzuki Roshi wrote: “When you bow, you should just bow; when you sit, you should just sit; when you eat, you should just eat.”
  2. Don’t forget self-care. We cannot pour from an empty cup, as they say. When we’re tired and tapped out, we can become negative, resentful, and unproductive. Take time to recharge and recover. Allow yourself to rest during weekends. Spend time with your family. Enjoy a hobby unrelated to your work. Read. Write. Meditate. Pray. Sleep.
  3. Consider starting a meditation practice. Decide on a place and time to meditate. It can be in the morning as soon as you wake up or at night before you go to bed. You can start with five minutes of meditation. Sit down, relax your body, and focus on your breath.

Mindfulness meditation is not a panacea or a cure-all. It’s not a one-size-fits-all solution for all mental and psychological problems. It can, however, be a tool to reduce stress and regulate awareness, so we can be more focused, effective, and compassionate human beings.

JUDY CAPILI is the HR Business Partner Lead for Financial Markets and Institutional Banking. She is a Certified Mindfulness Teacher (CMT-P) accredited by the International Mindfulness Teachers Association (IMTA), having completed her teacher training from Engaged Mindfulness Institute (EMI).  She leads Metrobank’s weekly Mindful Moments, a 30-minute drop-in meditation and reflection session for employees who need to de-stress over their lunch period.

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Equities 3 MIN READ

Stock Market Weekly Update: Cautiousness remains

A host of factors keeps investors on their toes — the US fed tightening, rising oil prices, and political appointments of the new government.

May 16, 2022By FirstMetroSec Research


The Philippine Stock Exchange index (PSEi) dropped by 380.73 points, or 5.63% week-on-week, to close at 6,379.17.

Investors remained cautious across global markets amid aggressive US Fed tightening, rising oil and commodity prices, and supply chain bottlenecks. They likewise remained circumspect as they await clarity on the economic platforms and Cabinet lineup of the presumptive president-elect, Ferdinand “Bongbong” Marcos Jr.

Furthermore, the possibility that the Bangko Sentral ng Pilipinas (BSP) may raise key policy rates earlier than expected, owing to the country’s strong first quarter 2022 GDP print at 8.3%, did little to infuse optimism in the stock market.


This week, the market is expected to bounce following Wall Street’s rally last Friday as some investors remain hopeful the US Fed will implement monetary policies conducive to a soft landing.

A technical bounce is likely to occur at the start of the week as the Relative Strength Index (RSI), a technical indicator that indicates bullishness or bearishness in the stock market, reached oversold levels last week.

However, gains may be capped as global recession fears continue to hound investors, who will also be closely watching out for any key policy rate surprises from the BSP Monetary Board meeting on May 19, 2022, Thursday.


BDO Unibank, Inc. (BDO) — BUY

Valuations of the bank remain attractive, trading at 1.2x forward price-to-book value per share. Potential early rate hikes by the BSP should bode well for bank yields in the next few quarters. Accumulate shares once price breaks above PHP 135 and take profit at PHP 150 to PHP 160, or P170 for long term investors. If price breaks down from PHP 124, limit risk and cut loss to protect capital.

Bank of the Philippine Islands (BPI) — BUY

We expect BPI to deliver 41% and 21% net earnings growth in

2022 and 2023, respectively, driven by high single-digit loans growth and further improvements in asset quality. Potential early rate hike by the BSP should give a boost to bank yields in the next few quarters. We recommend accumulating shares once the price breaks above PHP 100 and take profit at PHP 110 to PHP110. If price breaks down from PHP 92, limit risk and cut loss.

Robinsons Land Corp. (RLC) — BUY

Valuation remains attractive as the stock is currently trading at 0.97x price-to-book value per share for full year 2022. Buy at current prices.


Resistance: 6,400 / 6,600

Support: 6,000 / 6,200

The PSEi significantly dropped last week, breaking below the 6,600/6,400 levels with increasing volume.

The 6,200 level is crucial since a break below the said level will result in a 52-week low and a likely retest of the 5,750 level. On a positive note, the market is trading at oversold levels with the RSI at 26. Usually, the PSEi quickly rebounds after it hovers at oversold territory.


Continue setting stop limit orders especially below 6,200 to protect capital. Support levels are currently at 6,200/6,000. Bargain hunters can prepare for the probable bounce and set take-profit levels if the market fails to break above the resistance levels.


Monday, May 16, 2022

– Corporate Earnings: Converge ICT Solutions, Inc. (CNVRG)
– Corporate Earnings: Megaworld Corp. (MEG)

Tuesday, May 17, 2022

– Overseas Filipino (OF) remittances for March 2022 (2.9% est., 1.3% in February 2022)
– US Retail Sales for April 2022 (1.0% est., 0.7% in March 2022)
– Corporate Earnings: GT Capital Holdings, Inc. (GTCAP)

Wednesday, May 19, 2022

– BSP interest rate decision (no change in rates expected)
– Corporate Earnings: Security Bank Corp (SECB)
– Corporate Earnings: Jollibee Foods Corp. (JFC)

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Fine Living 3 MIN READ

How to dress like a lady boss

Make a good impression and perhaps advance your career with what you wear

May 13, 2022By Kristabel Peñafuerte

Growing up, I enjoy seeing my mom meticulously putting together her office attire. She just loves planning her day-to-day outfits and picking which lipstick matches her look.

I guess it started my love for power dressing. A power suit exudes elegance and confidence without trying hard. You can even play around with colors depending on your personality. There are also some different silhouettes or types of fittings that you can choose from to elevate your corporate dressing game.

After all, dressing up plays a role in establishing one’s credibility and professional image. If you’re unsure of what to wear, worry no more. We’re here to guide you so you can work in style.

Look 1:

It may be cliché, but classic styles never go out of style. Go for a classic tailored suit, a pair of trusty nude pumps, and a pair of stud earrings.

While a neutral-colored tailored suit goes well with every body type, you may want to play around with fabrics. Cashmere, linen, and cotton are some of the popular fabric choices.

Finish off your neutral outfit with a statement piece – a pop of plum structured bag.

When purchasing a work bag, get a bag that best fits your lifestyle. If you’re a light packer, a medium-sized tote bag is enough to carry around all your daily essentials.

Look 2:

A white linen button down shirt and pencil cut skirt will always be a practical go-to workwear combo. But why not try to spice things up a little? Match your silk shirt with a high waist linen pencil cut skirt to elongate your frame.

If you want to loosen up your skirt by mid-day, you may freely adjust your belted pencil cut skirt. Complete your look with a pair of white block pumps to make your legs look longer without sacrificing comfort.

Look #3:

Whenever people ask me if I should pick comfort or style, I always tell them, “Why not pick both?” Balance style and comfort by trying this vintage-meets-modern look.

This will give you extra oomph to your daily workwear. Besides, a powerful lady boss wardrobe will never be complete without a classic tailored suit.

Update your look by adding a dainty ruffled top, which is making a fashion comeback this year. Aside from looking stylish, a slightly loose ruffled top can also help you hide some belly fat, as it can draw attention away from your tummy.

Top it off with red pumps and a tote bag to take your neutral suit to the next level.

Look 4:

Bright orange made its way over the spring runways. Take advantage of the orange is the new black trend by adding a statement puzzle bag paired with an orange blazer and printed trousers.

Orange may look intimidating for those who are starting to experiment with colors for the first time, but note that this vibrant hue often goes well with different types of skin tone.

To complement your bold ensemble, try to finish off your look with a pair of white kitten heels and button down in the shade of dusty pink.

Look 5:

If you have a lot of errands for the day and still want to be fashionable, a pair of buckled suede loafers can save the day.

Elevate your workwear style by playing around with different textures. Put on a leather skirt which is a versatile statement piece that you can wear from day to night. Pair it with a textured ruffled blouse for an elegant and polished look.

Three seconds

Building your workwear closet can help you play around with your looks to fit your personality. Take inspiration from my suggestions above to express yourself.

As my fashion professor would always say, it only takes three seconds for people to make an impression of you. Leave a good one by how you dress up.

KRISTABEL PENAFUERTE is a Corporate Affairs Officer of Metrobank. Prior to her role in corporate communications, she was into fashion marketing and styling.

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Economy 3 MIN READ

Keeping track of inflation

When there are uncertainties on the horizon, a closer monitoring of inflation figures is needed to make accurate forecasts.

May 11, 2022By Renz Calub

In the previous article, I discussed the drivers of the recent spikes in inflation. Do you remember them?

Prices have soared largely because of demand picking up, worsened by supply side uncertainties brought about by COVID-19 and the ongoing Russia-Ukraine war. As an investor, inflation matters because soaring prices may affect your investments in the long run. Today we will talk about how to forecast inflation.

Using historical data to predict the future

There are several ways to forecast inflation. Some use rather complex models that account for the entire economy to project future price values, but these depend on too many assumptions about consumption and government activity.

Some use movements in commodity prices to predict future prices, but these depend on which commodities move strongly with the Consumer Price Index (CPI), which is a weighted average of a representative basket of goods and services. Some use simple statistical models that account for past inflation performance to predict future inflation.

Metrobank’s Research and Business Analytics Department (RBAD) uses past inflation values to forecast future inflation. This method assumes that inflation is steady and past prices can be used to extrapolate future inflation. It is simple. It doesn’t require assumptions about other variables (say, commodity prices) to forecast inflation, and it can capture seasonal changes in demand (e.g., Christmas season, summer, etc.).

The caveat here is that if the recent past is volatile, market conditions will take time before it will be observed as a “past price” in the model, meaning inflation will tend to be understated during rising prices.

To demonstrate, the Philippine Statistics Authority (PSA) has reported 3% inflation for January and February. This means that the model will most likely forecast a lower inflation number for March, since the inflation for the past 2 months has been somehow tame.

Figure 1 shows the forecast plots using the data until February 2022. The forecasts are within the 2-4% range. The projected inflation for March was at 3.1%, with the full year 2022 forecast at 3.4%. The shaded range represents the upper and lower bounds of the inflation forecasts, capturing the uncertainties in projecting future prices.

Figure 1: This shows the forecast plots using the data until February 2022. The forecasts are within the 2-4% range, and the projected inflation for March was at 3.1%, with full year 2022 forecast at 3.4%.

But this was before Russia started attacking Ukraine. The economic sanctions imposed by the West on Russia in response to its invasion of Ukraine have constrained the supply of oil across the world.

Russia produces about 11% of the world’s total oil, and the expected reduction in oil supply drove crude oil prices to as high as USD 130/barrel. This is on top of the supply crunch brought about by COVID-19 uncertainties and lockdowns in major economies such as China. These events called for an upward bias in the forecasts.

Consequentially, the actual inflation figure for March came in at 4.0%, about 80 basis points higher than the forecast. Figure 2 shows the projected inflation rate. You will see that the mean forecast now hovers around 5-6%.

Figure 2: With the Russia-Ukraine war and the supply chain bottlenecks, the March inflation print came at 4.0%, which pushes the forecast for the succeeding months to between 5-6%.

Looking forward

With the current geopolitical events and supply chain problems, full year 2022 inflation is expected to come in at 5.4%, while 2023 inflation is expected to come at around 3-5%. This wide range for 2023 reflects the uncertainties in the inflation forecast amid the volatility of food and energy prices, with the Bangko Sentral ng Pilipinas (BSP) likely to step in to hike rates and slow down inflation at the expense of economic growth.

In any case, the ongoing uncertainties warrant a closer tracking of inflation figures and continued forecast updates when new inflation numbers come in.

RENZ CALUB is the Deputy Head, Research and Business Analytics Department, of Metrobank.

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Equities 3 MIN READ

Stock Market Weekly Update: Volatility in the horizon

We can expect the markets to be volatile this week amid election results and as more companies release their corporate earnings.

May 10, 2022By First Metro Securities


The Philippine Stock Exchange index (PSEi) jumped 28.65 points or 0.43% higher week-on-week to close at 6,759.90.

There was a relief rally on Wednesday and Thursday, but the index fell on Friday as a result of spillover effects from a selloff in Wall Street and uncertainty about Philippine elections.

As expected, the US Federal Reserve also raised borrowing rates by 50 basis points (bps).


The market is expected to be volatile as investors digest early unofficial election results and await the release of more corporate earnings results for the first quarter of 2022.

Investors will also be looking out for the release of the of US inflation print for April 2022, the Morgan Stanley Capital International (MSCI) semi-annual index review, and the first quarter 2022 GDP.

Another local consideration is the possibility of that the Bangko Sentral ng Pilipinas may raise its key policy rate in June 2022 if the Philippine economy grew by 6-7% in the first three months of 2022.


SM Investments Corp. (SM) — BUY

The stock is trading at a steep discount compared to historical valuations, with momentum from 4Q 2021 to spillover well into the next 12 to 18 months as the economy reopens. SM remains to be in an advantageous position to leverage on this reopening and the country’s overall macroeconomic fundamentals.

We recommend accumulating shares around PHP 840 to PHP 870 and to set a stop limit below PHP 815. Take profit at PHP 960 to PHP 1,000. For long term investors, it should be at the PHP 1,267 level.

Nickel Asia Corp. (NIKL) — BUY

The adoption of electric vehicles especially in Europe and the US continue to rise along with the growth in stainless steel production and the incentives and penalty programs imposed by the European and US governments. This bodes well for the company.

We recommend accumulating shares up to PHP 7.70 and setting a stop limit below PHP 7.24. Take profit at around PHP 8.50 to PHP 9.50.

Semirara Mining and Power Corp. (SCC) — BUY

The company is expected to sustain its earnings growth this year as coal sales volume and energy prices remain elevated due to the ongoing global supply disruptions and surge in demand.

Our recommendation is to accumulate shares at current prices until PHP 27.50 and set a cut loss limit below PHP 26.50. You can take profit at around PHP 31 to PHP 33.


There is still that bearish momentum if you look at the Moving Average Convergence Divergence (MACD), a measure of bullishness or bearishness in the price trends of stocks. The PSEi rebounded last week but failed to stay above the 6,800 level. The volume on down days were higher than the volume on up days, indicating that the bears are still in control.

Resistance: 6,800 / 7,200
Support: 6,600 / 6,400


It is advisable to continue setting stop orders to manage your risk. We see support levels at 6,600 and 6,400. Breakout traders can accumulate once market returns above 7,200.


Wednesday, March 11, 2022
– US Inflation for April 2022 (8.1% est., 8.5% in Mar2022)
– Corporate Earnings: ACEN Corp. (ACEN)
– Corporate Earnings: SM Investments Corp. (SM)
– Corporate Earnings: Robinsons Land Corp. (RLC)
– Corporate Earnings: Monde Nissin Corp. (MONDE)
– Corporate Earnings: LT Group, Inc. (LTG)

Thursday, March 12, 2022
– Philippine first quarter 2022 GDP (6.2% est., 7.8% in 4Q 2021)
– Corporate Earnings: Ayala Land, Inc. (ALI)

Friday, March 13, 2022
– Corporate Earnings: Ayala Corp. (AC)

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