Stock Market Weekly: Still inching closer toward peace

Last week, the Philippine Stock Exchange index (PSEi) rose by 2.18% week-on-week (w/w) to close at 5,960.97 (+127.33 points), driven primarily by improving geopolitical sentiment as news pointed to the US and Iran moving closer to a potential deal.

This positive development helped offset concerns following weaker-than-expected 1Q 2026 gross domestic product (GDP) growth of 2.8%, which missed consensus expectations at 3.5%. The index briefly climbed to the 6,100 level midweek on net foreign inflows and with the peso appreciating to PHP 60.50 against the US dollar, before paring gains and settling back at the 5,960 level toward the end of the week amid profit-taking activity.

This week, we expect the local bourse to trade sideways with a downward bias as the ongoing volatility in tanker flows remains marked by abrupt closures, military incidents, and conflicting diplomatic signals.  

Outbound vessel activity through the Strait of Hormuz is still significantly impaired, with the full reopening of the waterway uncertain despite ceasefire talks. Meanwhile, geopolitical tensions escalated further as Israel continued its attacks on Lebanon targeting terrorist cells.  

Despite Brent crude settling at USD 90.38/barrel and West Texas Intermediate (WTI) at USD 83.85/barrel, the downside may be partially capped as domestic fuel prices are expected to decline by PHP 24–26/liter for diesel and PHP 2.50–3.50/liter for gasoline.  

Nonetheless, investors are likely to remain cautious as ceasefire efforts between Israel and Lebanon, alongside the reopening of the Strait of Hormuz, have yet to gain traction, continuing to weigh on overall market confidence and visibility on the conflict’s resolution. With impaired volumes and escalation risks still elevated, we recommend maintaining a guarded stance while remaining agile.

Resistance: 6,100/6,200

Support: 5,850/5,900 

The PSEi rose by 2.18% w/w to close at 5,960.97 (+127.33 points), rebounding from its support levels in the 5,800 levels. The index has currently formed a slight double bottom and may signal a bullish momentum. Price action shows resistance at the 50-day moving average (MA), which may indicate a potential breakout. Moreover, as foreigners have returned to in-flow status, this could indicate a rally similar to the beginning of 2026. Accumulating on breakout at the 6,100 levels may be advised as the foreign inflows have returned.

Maynilad Water Services, Inc. (MYNLD) | BUY ON PULLBACK | CONSENSUS TARGET PRICE: PHP 20.06

By the end of June 2026, MYNLD will have met the six-month minimum trading requirement for PSEi eligibility. Moreover, since its November 2025 initial public offering (IPO), the stock has gained roughly 55%, lifting MYNLD’s full market capitalization to around 22nd place.

Accumulating MYNLD once it pulls back around PHP 23.00 is advisable. Take profit around PHP 25.30 and set a stop-loss limit at PHP 21.85.

Megaworld Corp. (MEG) | BUY ON PULLBACK | FMSEC TARGET PRICE: PHP 2.80

Amid elevated geopolitical risks, we favor defensive, consumer-facing names better positioned to weather macro uncertainty. Mall operators are still our preferred retail exposure on expectations of sustained foot traffic. While malls contribute around 8% of full year 2025 revenues for MEG, the group benefits from a township model that supports steady, captive footfall. MEG’s mall segment delivered a solid performance in 2025, with revenues rising 9% year-on-year (y/y) to PHP 6.9 billion, underpinned by robust occupancy levels and improving retail activity.

Accumulate MEG once it breaks above its 100-day MA at PHP 2.12 to confirm bullish momentum. Take profits at PHP 2.33 and set stop loss limits below PHP 2.01.

Converge ICT Solutions, Inc. (CNVRG) | BUY ON SUPPORT | FMSEC TARGET PRICE: PHP 20.30

While the two-week US-Iran ceasefire has eased near-term tail risks and sparked a global relief rally, key sources of volatility remain unresolved amid fragile negotiations and a fluid geopolitical backdrop. One plausible scenario is renewed ceasefire violations, which could quickly turn market sentiment cautious again. In such a case, higher oil prices and shipping costs would pressure corporate margins and household budgets, slowing the economic recovery.

Accumulate CNVRG at key support levels between PHP 11.20 and 12.00. Take profits at PHP 12.76 and set a stop loss limit at PHP 11.02.