The Philippine Stock Exchange index (PSEi) rose 1.59% week-on-week (w/w) to 6,286.70 (+98.67 points), underpinned by a full week of sustained net foreign inflows. The local bourse started on firm footing as optimism carried over from the prior week’s World Bank upgrade of the Philippines to upper-middle-income status.
Positive sentiment was further reinforced by the June 2026 inflation, which came in softer than expected at 6.4% (previous: 6.8%; estimates: 6.6%). On Thursday, momentum faltered after renewed US-Iran tensions drove both Brent and West Texas Inter-mediate (WTI) crude oil back above USD 70 per barrel.
Nonetheless, the index quickly recovered after US President Donald Trump signaled Iran’s willingness to continue peace talks, erasing the prior day’s losses as the week ended.
Amid the lack of local data releases this week, we expect the local bourse to trade sideways with a downward bias as investors remain focused on geopolitical developments. The US launched a third round of strikes on Iran over the weekend after the latter was said to attack a Cyprus-flagged commercial vessel in the Strait of Hormuz.
Iran has reportedly retaliated with attacks on Bahrain, Kuwait, Jordan, Qatar, Oman, and the United Arab Emirates, while declaring the Strait once again closed. Despite this, the Joint Maritime Information Center noted that the route was still open to shipping on Sunday, though the threat level remains “severe”.
Against this backdrop, attention is likely to shift back to movements in oil prices and bond yields, with the US 10-year Treasury yield returning above 4.5%. Locally, the recent spike in crude oil prices is expected to translate into fuel hikes, with diesel projected to increase by PHP 2.00-4.00 per liter, while gasoline will either decrease or increase by up to PHP 1.00 per liter. From the foreign front, investors will also be watching US inflation data for June 2026, which should provide further clarity on the Fed’s policy rate direction.
Resistance: 6,300/6,350
Support: 6,150/6,200
The PSEi increased by 1.59% w/w to 6,286.70 (+98.67 points), trading above its key moving averages (MAs) and testing the 6,300 resistance level, indicating improving market sentiment. Meanwhile, the MACD also remains above the signal line, supporting strengthening bullish momentum. However, with the RSI gradually approaching overbought territory, the index may experience a slight pullback in the near term.
Accumulating select value stocks on slight pullbacks for more attractive entry points is advisable.
Century Pacific Food, Inc. (CNPF) | BUY ON BREAKOUT | FMSEC TARGET PRICE: PHP 41.00
The US and Iran have signed a memorandum of understanding (MOU) aimed at de-escalating tensions, improving shipping conditions, and restoring access to the Strait of Hormuz. While risks remain, the agreement represents a more favorable outcome than what markets had anticipated.
In this backdrop, we prefer companies with strong balance sheets, robust cash generation, resilient demand profiles, and the ability to defend margins – areas where CNPF stands out among its peers.
Accumulate CNPF once it breaks above PHP 31.16. Take profits at PHP 34.20 and set stop loss limits below PHP 29.60.
Converge ICT Solutions, Inc. (CNVRG) | BUY | FMSEC TARGET PRICE: PHP 20.30
Converge ICT Solutions, Inc. (CNVRG) stands as the primary candidate for index exclusion from the PSEi, based on our recent screening. Amid the index exclusion overhang, CNVRG has declined 35.38% YTD (as of July 1, 2026), as investors anticipate excess selling activity to push down the stock during the August 2026 PSEi rebalancing round.
With CNVRG, currently trading near its 2-year low of PHP 9.60, we think that the market has nearly fully priced in the counter’s exit from the PSEi, while disregarding the company’s robust fundamentals.
Accumulating CNVRG at current levels around PHP 9.60-9.80 is advised. Take profits when CNVRG reaches PHP 11.15 and place your stop loss below PHP 8.9.
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. The potential US-Iran agreement could further support global risk appetite and foreign inflows into emerging markets, benefiting large-cap names such as SMPH.
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.
