Stock Market Weekly: Deciphering mixed signals

The main index ended the week lower by 15.37 points to close at 5,961.40 (-0.26% week-on-week) due to a lack of fresh catalysts alongside sustained foreign outflows, which continued to weigh on market sentiment.  

The Philippine peso’s depreciation to a fresh record low of PHP 61.75 against the US dollar further dampened investor confidence, reinforcing a more guarded stance. This cautious tone was also reflected in the stance of corporates during their 1Q 2026 earnings briefings. While all 30 PSEi names have already reported their 1Q 2026 results, aggregate net income (excluding SMC) came in broadly in line with consensus estimates but was insufficient to drive a meaningful uplift in the index.

The local bourse is likely to trade sideways with a downward bias, as mixed signals from US President Donald Trump over the weekend added to uncertainty. He initially said a peace deal with Iran was largely in place, before later advising US negotiators to not rush the process.

This swift change in language may keep investors risk-averse in the near term. Meanwhile, MSCI related flows may inject volatility following the Philippines’ 3 basis-point (bp) down weight in the MSCI Emerging Markets Index. Price dislocations are expected around the May Quarterly Index Review (QIR), with adjustments taking effect after the close on Mayb 29, 2026 (effective June 1, 2026). We flag JFC, ICT, and MER as names likely to experience outsized swings as passive funds re-balance.

Resistance: 6,050/6,100

Support: 5,850/5,800 

The Philippine Stock Exchange index (PSEi) declined by 0.26% w/w to 5,961.40 (-15.4 points) and is currently consolidating. The index has recently crossed above the 20-day moving average (MA) and is now approaching the 50-day MA, indicating improving short-term strength.

Momentum indicators are also showing signs of recovery, with the RSI trending upward, while the MACD is nearing a bullish crossover above the signal line, suggesting a potential continuation of the early recovery. Accumulating on breakout above the 6,050 level, to confirm bullish momentum, is advisable. 

RL Commercial REIT, Inc. (RCR) | BUY ON BREAKOUT | FMSEC TARGET PRICE: PHP 8.40

RL Commercial REIT, Inc.’s (RCR) 1Q 2026 net income rose 34.5% year-on-year (y/y) to PHP 2.37 billion, in line with consensus and ahead of our estimates. This growth was driven by strong mall and office performance and the infusion of nine new assets. As of 1Q 2026, gross leasable area (GLA) remains at 1,152k square meters, while occupancy rates remain healthy at 96% and weighted average lease expiry (WALE) at 4.03 years.  

Accumulate RCR once it breaks above PHP 7.20 to confirm bullish momentum. Take profits at PHP 7.90 and set stop loss limits below PHP 6.84.

JOLLIBEE FOODS CORP. (JFC) | BUY ON PULLBACK | FMSEC TARGET PRICE: PHP 145.00

With elevated debt and interest expenses, JFC has limited room to absorb further margin compression, while planned price hikes pose risks, given the company’s inflation-sensitive Philippine customer base. Its removal from the MSCI Standard Index may also dampen sentiment and foreign participation. Still, the recent sell-off suggests near-term weakness may be largely priced in, opening room for a technical rebound after the May 29, 2026, MSCI re-balancing implementation.

Accumulating on pullback at around PHP 130 is advisable to capitalize on excess selling pressure. Take profits at around PHP 145 and set a stop loss at around PHP120.

MANILA ELECTRIC CO. (MER ) | TRAILING STOPS | FMSEC TARGET PRICE: PHP 650.00

Within the MSCI Philippines Standard Index, MER will see the largest weight decrease of 2.28 per-centage points. MER’s foreign inclusion factor (FIF) was reduced by 9 basis points, translating to a 36% reduction in its the MSCI Philippines Standard Index outflows as both active and passive funds rebalance portfolios in anticipation of changes to the MSCI global indices.

For those with exposure, implement trailing stops to manage risk from the upcoming MSCI rebalancing.