The Philippine Stock Exchange index (PSEi) climbed 3.81% week-on-week (w/w) to 6,135.35 (+225.29 points) on improved global risk appetite. The index opened on strong footing, surging past 6,200 for the first time since March 2026 following the announcement of a potential US-Iran peace deal.
An initial 14-point memorandum of under-standing (MOU) was signed on Wednesday, reopening the Strait of Hormuz and launching a 60-day negotiation period to develop a permanent peace agreement. This drove Brent and West Texas Intermediate (WTI) crude oil back near USD 80-per-barrel for the first time since the conflict began.
However, gains moderated mid-week as investors de-risked ahead of key policy rate decisions. As it happened, the US Federal Reserve held rates at 3.75%, while the Bangko Sentral ng Pilipinas (BSP) raised its policy rate by 25 basis points (bps) to 4.75%. Hawkish rhetoric from both central banks kept momentum subdued as the week ended, though the PSEi held above 6,100.
Amid the lack of major data releases this week, we expect the local bourse to trade sideways with a downward bias as focus remains on US-Iran negotiations. Over the weekend, Iran reportedly again closed the Strait of Hormuz following Israeli strikes in Lebanon, citing the attacks as a breach of the MOU.
In response, US President Donald Trump has threatened renewed strikes on Iran should the conflict in Lebanon persist. Despite this, the first round of negotiations between US and Iranian officials in Switzerland proceeded overnight, with talks reportedly centered on enforcing a ceasefire between Israel and Hezbollah and easing oil sanctions.
Locally, investors will continue to digest hawkish signals from the BSP, with Governor Eli Remolona Jr. noting further room for tightening as inflation is expected to remain above-target at 6.4%/4.5% in 2026/27. Nonetheless, fuel price rollbacks could provide near-term relief, with diesel expected to decline by PHP 7.50-9.50 per liter and gasoline by PHP 3.00-5.00 per liter.
Resistance: 6,250/6,300
Support: 6,050/6,100
The PSEi increased by 3.81% w/w to 6,135.35 (+225.29 points) following a gap-up at the start of the week, with price breaking above key moving averages (MAs) (20-day, 50-day, 100-day, and 200-day), indicating improving momentum.
However, as the index begins to show early signs of reversal and the RSI eases from near overbought levels, it may experience a gap fade, with the 200-day MA now acting as immediate support levels on pullbacks. Accumulating on pullbacks toward the 6,050 level is advisable for a more attractive entry point.
SM Prime Holdings, Inc. (SMPH) | BUY | FMSEC TARGET PRICE: PHP 24.00
We view SM Prime Holdings, Inc. (SMPH) as an attractive cyclical value play and a key beneficiary of improving market sentiment, given its significant weight in both the PSEi (18.52%) and MSCI (8.15%) indices.
The group's earnings remain resilient, supported by its mall operations, which account for roughly 60% of revenues and continue to post steady growth. Looking ahead, the long-awaited Pasay 360 development remains a key growth driver.
Accumulating on current levels at the 20-day MA around PHP 18.50 is advisable. Take profits at around PHP 21.00 and set a stop loss at around PHP 16.80.
Century Pacific Food, Inc. (CNPF) | BUY ON BREAKOUT | FMSEC TARGET PRICE: PHP 41.00
Century Pacific Food, Inc.’s (CNPF) 1Q 2026 net income increased by 10% year-on-year (y/y) to PHP 2.08 billion in line with consensus and our estimates. CNPF delivered solid volume growth in 1Q 2026 despite higher input costs, reflecting resilient demand for its branded business.
With fuel prices and inflation remaining elevated, consumers are likely to stay price-conscious, supporting demand for consumer staples such as canned fish and meat, which are CNPF’s core products.
Accumulating CNPF once it breaks out of its downtrend channel around PHP 30.20 is advisable. Take profits at PHP 33.22 and set a stop loss limit at PHP 28.69.
MANILA ELECTRIC CO. (MER) | BUY | FMSEC TARGET PRICE: PHP 650.00
The Morgan Stanley Capital International (MSCI) announced a down weight of MER in the Philippine Standard Cap Index. As a result, MER’s weight in the MSCI Philippines Standard Cap Index was projected to decrease to 5.83%.
The significant adjustment was expected to result in approximately USD 377.7 million in passive and active outflows from MER. Despite this, we viewed it as a buying opportunity to accumulate MER at a discount.
Accumulate MER near support levels around PHP 570. Set stop-limit orders be low PHP 541.0 and take profits once it reaches PHP 627.0.
