Bargain hunting, BSP easing hopes may lift PSEi

Philippine stocks may continue to move sideways this week and get a lift from hopes of further monetary easing and bargain hunting as investors wait for new catalysts.

On Friday, the bellwether Philippine Stock Exchange index (PSEi) rose by 0.38% or 24.08 points to close at 6,315.93, while the broader all shares index increased by 0.21% or 8.20 points to 3,751.23.

Week on week, however, the PSEi fell by 0.37% or 23.45 points from the 6,339.38 finish on Aug. 8.

“The PSEi closed marginally lower [last] week as investors sifted through second-quarter earnings data while weighing a potential Federal Reserve rate cut,” online brokerage 2TradeAsia.com said in a market note.

“Profit taking took over last week as local economic concerns weighed on sentiment. The local market has been alternately moving between gains and losses for 10 weeks already as investors remain indecisive of its direction,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

For this week, Philippine shares could remain range-bound, he said.

“With the market at attractive levels, we may see some bargain hunting in this week’s trading,” Mr. Tantiangco said. “A strong rally is not expected, however, unless we see fresh positive leads. Investors are still expected to maintain a cautious stance while waiting for new catalysts.”

He added that expectations of a rate cut at the Bangko Sentral ng Pilipinas’ (BSP) Aug. 28 policy meeting could give the market support.

Last week, BSP Governor Eli M. Remolona, Jr. said a rate cut is “quite likely” at their meeting this month as inflation is likely to settle within its annual target.

The central bank has lowered borrowing costs by 125 basis points (bps) since it began its easing cycle in August 2024, bringing the benchmark rate to 5.25%.

Mr. Remolona said they are expecting to deliver two more rate cuts this year. However, three reductions are “unlikely.”

Mr. Tantiangco said the PSEi is expected to trade between 6,150 and 6,400 this week. “From a technical standpoint, the local market is still bearishly biased as it continues to form lower highs.”

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort put the PSEi’s support at 6,204.04 and resistance at 6,591.94.

“BSP Governor Remolona reiterated dovish signals on possible monetary easing in terms of possible two 25-bp rate cuts for the rest of 2025 amid benign inflation and external uncertainties that could slow down local economic growth, signaling policy priority of boosting the local economy,” Mr. Ricafort said in an e-mail.

2TradeAsia.com placed the PSEi’s immediate support at 6,250 and resistance at 6,550.

“The divergence between a potential global risk-on rally and local market lull creates a tactical consideration for market participants… The impending easing cycle may be a significant potential catalyst for equities,” it said. — Revin Mikhael D. Ochave