PSEi may go up with expected BSP rate pause

PHILIPPINE share prices may rise this week with markets expecting the central bank to keep the key rate steady at its policy meeting on Thursday.

“The local market remains at attractive levels and we may still see bargain-hunting next week that can help it extend its gains,” Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financial, Inc., said in a Viber message at the weekend.

The Bangko Sentral ng Pilipinas (BSP) is widely expected to keep the policy rate unchanged at its meeting on Thursday.

“If the policy rates are unchanged, it may help the market advance further,” he said. “Investors are also expected to watch out for other catalysts that would point to a positive outlook for our macroeconomic and corporate fundamentals.”

The benchmark Philippine Stock Exchange index (PSEi) went up by 0.72% or 46.92 points to end at 6,508.34 on Friday. The broader all-share index rose by 0.66% or 23.04 points to 3,467.11.

Week on week, the PSEi inched up by 0.02% or 1.19 points.

Most sectoral indices advanced, led by services which rose by 2.11% or 31.62 points to 1,529.15. Property went up by 1.76% or 46.38 points to 2,668.36, while industrials gained 0.5%or 46.01 points to 9,247.32. Holding firms added 0.44% or 28.78 points to 6,449.43.

On the other hand, mining and oil slid by 0.31% or 31.46 points to 9,826.50, while the financial index fell by 0.13% or 2.52 points to 1,843.21.

The index advanced for a second straight day on Friday as markets anticipate a pause on local policy rates on June 22 to match the US Federal Reserve’s rate pause, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

All 15 economists in a BusinessWorld poll held last week predicted the BSP to keep the policy rate at a near 16-year high of 6.25%.

The BSP’s policy-setting Monetary Board paused its tightening cycle last month after raising rates by 425 basis points since May last year.

The Fed kept interest rates unchanged at 5-5.25% on June 15, but signaled that borrowing costs could still rise by as much as half-a-percentage point by year-end amid a strong US economy and inflation that has not cooled as much.

The next Federal Open Market Committee meeting is set for July 25 and 26.

Stock prices could go up as traders try to find bargains so as not to miss out, Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message.

Mr. Tantiagco placed the local bourse’s immediate support at 6,400 and resistance at 6,600, while Mr. Arce put support at 6,430 and resistance at between 6,523 and 6,593. – Adrian H. Halili