Stocks rise on expectations of slower inflation

Philippine stocks posted a slight rebound on Monday amid expectations that headline inflation eased further last month.

The bellwether Philippine Stock Exchange index (PSEi) rose by 0.17% or 11.13 points to close at 6,352.66, while the broader all shares climbed by 0.53% or 19.79 points to 3,743.41.

“The local market started the week on a positive note, driven by expectations that the Philippines’ inflation rate last May had remained below the government’s 2%-4% target, in turn giving the Bangko Sentral ng Pilipinas (BSP) more room to cut their policy rate,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Gains were tempered, however, with concerns over US President Donald J. Trump’s plan to double the US’ steel import tariffs,” he added.

The Philippine Statistics Authority is scheduled to release May inflation data on Thursday (June 5).

A BusinessWorld poll of 17 analysts yielded a median estimate of 1.3% for the May consumer price index (CPI), slower than the 1.4% in April and 3.9% in the same month a year ago. This is within the BSP’s 0.9%-1.7% forecast for the month.

If realized, this would be the lowest CPI in more than five years or since the 1.2% in November 2019.

Meanwhile, on Friday, Mr. Trump announced a plan to hike tariffs on imported steel and aluminum to 50% from 25%, increasing pressure on global steel manufacturers as part of his trade war.

“Philippine shares closed slightly positive to kickstart the month of June as the market gears up for new economic data that could influence price action movement this week,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Locally, key data include Monday’s manufacturing purchasing managers’ index, Thursday’s May inflation, and Friday’s unemployment, industrial output, and consumer confidence — offering a broad view of economic health,” he added.

Majority of sectoral indices closed higher on Monday. Property went up by 1.45% or 32.24 points to 2,245.52; services climbed by 1.3% or 27.97 points to 2,166.30; mining and oil increased by 1.03% or 101.17 points to 9,890.08; and financials rose by 0.16% or 3.96 points to 2,400.1.

Meanwhile, industrials went down by 0.39% or 35.17 points to 8,889.57 and holding firms dropped by 0.37% or 20.08 points to 5,331.71.

“Bloomberry Resorts Corp. was the day’s top index gainer, climbing 5.26% to PHP 4.40. Monde Nissin Corp. was the worst index performer, dropping 5.26% to PHP 7.20,” Mr. Tantiangco said.

Value turnover declined to PHP 7.08 billion on Monday with 617.85 million shares from the PHP 40.03 billion with 2.04 billion issues traded on Friday.

Advancers bested decliners, 119 versus 80, while 54 names were unchanged.

Net foreign buying stood at PHP 418.29 million on Monday, a turnaround from the PHP 15.31 billion in net selling recorded on Friday. — Revin Mikhael D. Ochave