Stock Market Weekly: On the coattails of global developments

WHAT HAPPENED LAST WEEK

The Philippine Stock Exchange index (PSEi) ended the week on a firmer footing at 6,149.13, slipping -0.10% week-on-week (w/w) or -6.44 points after touching the 6,000 levels last Wednesday, its lowest close since April 2025.

Trading activity was subdued, with average daily turnover at PHP 4.8 billion, as investors maintained a risk-off stance amid mostly domestic headwinds. Sentiment was dampened by controversies surrounding flood control projects and the use of government funds, with Finance Secretary Ralph Recto stating that economic losses have already reached PHP 118.5 billion since 2023.

Additionally, the Philippine peso slipped to a near one-month low at PHP 57.51 against the US dollar, while inflation quickened to 1.5% in August 2025 – above both the 1.3% estimate and July’s 0.9% – driven largely by weather disturbances during the period.

On the foreign front, the US labor market added 22k jobs in August 2025 – below the consensus estimate of 75k additions. Most of the gains came from health care (+31k) and social assistance (+16k), offsetting losses in government (-15k) and wholesale trade (-12k).

The unemployment rate ticked up to 4.3% (July 2025: 4.2%). Labor force participation rate was unchanged at 62.2%, while wage growth came in at 3.7% year-on-year (y/y) in August (July 2025: 3.9%).

WHAT TO EXPECT THIS WEEK

Looking ahead, the index is expected to trade sideways with a slight upward bias, with global developments likely to set the tone. Softer US August jobs data (+22k vs est. +75k) has reinforced expectations of a 25-basis-point US Fed rate cut, with CME Group’s FedWatch Tool now pricing in an 89% probability.

Market attention will also focus on the upcoming release of US August inflation data on Thursday, September 11, 2025 (estimates: 2.9%; previous: 2.7%), which could further influence Fed policy action.

On the domestic front, the market may face downward pressure from PLDT, Inc. (TEL), as management issues tied to poor performance are expected to keep investors cautious over one of the index’s key constituents.

Resistance: 6,200/6,300

Support: 6,100/6,000

ANALYSIS

The PSEi slipped 0.10% w/w to 6,149.13 (-6.44 points), remaining below all key moving averages (20-day, 50-day, and 200-day). While still under the 6,200 level, the MACD and RSI have been firming up, indicating a more favorable setup. With the index now nearing 6,200, value buying could support a rebound, though persistent weakness may keep the benchmark closer to the 6,000 zone.

STOCK CALLS FOR THE WEEK

Converge ICT Solutions, Inc. (CNVRG) | BUY ON PULLBACKS | CONSENSUS TARGET PRICE: PHP 16.10

CNVRG has declined sharply as concerns over the Konektadong Pinoy Act were exacerbated by lowered management guidance for full year 2025. The stock dropped by 30% from its peak of PHP 21.40 in just two months, now trading below all key moving averages.

While the RSI has escaped oversold territory, CNVRG faces resistance at PHP 15.00, indicating persistent bearish sentiment in the near term. Nonetheless, we believe that CNVRG’s long-term growth prospects remain intact, with lowered guidance still indicating industry-leading revenue growth and return on invested capital (ROIC).

Accumulate CNVRG at key support levels between PHP 14.00–14.50. Take profits at PHP 16.10 and set stop loss limits at PHP 12.88.

Apex Mining Co., Inc. (APX) | BUY ON SUPPORT | FMSEC TARGET PRICE: PHP 8.28

APX broke out of its multi-month consolidation and is now trading around PHP 7.60, marking a new multi-year high. The breakout is backed by strong volume, reflecting solid conviction. All key moving averages are trending upward, reinforcing bullish momentum. The MACD has crossed above the signal line with a widening spread, confirming the breakout. That said, the RSI is in overbought territory, raising the risk of a near-term pullback.

Accumulating APX once it pulls back near the PHP 7.20 support is advisable. Take profits at PHP 8.28 and set stop loss limit below PHP 6.62.

D&L Industries, Inc. (DNL) | BUY ON BREAKOUT | CONSENSUS TARGET PRICE: PHP 5.70

DNL has been on a steady downtrend, even falling to its 52-week low of around PHP 4.70 following its removal from the MSCI Small Cap Index. Throughout this period, the stock has remained below all key moving averages, with the 20-day MA serving as immediate support.

Momentum indicators also point to continued weakness, with the RSI hovering in oversold territory and the MACD showing tepid signals. A sustained breakout above the 20-day MA, however, could signal a potential turnaround in the stock’s momentum.

Accumulating once DNL breaks above PHP 4.95 is advisable. Take profits at PHP 5.70 and set stop loss limits below PHP 4.55.

KEY DATA RELEASES

1. PH Unemployment Rate for July 2025 on Wednesday, September 10, 2025 (previous: 3.7%)

2. EU ECB Interest Rate Decision on Thursday, September 11, 2025 (estimates: 2.15%, previous: 2.15%)

3. US Inflation Rate for August 2025 on Thursday, September 11, 2025 (estimates: 2.9%, previous: 2.7%)

(First Metro Securities Disclaimer: We obtain our information from sources we believe are accurate and reliable, but we cannot guarantee its completeness or accuracy. Our content consists of opinions, not investment recommendations, and you should perform your own research before making any investment decisions. First Metro Securities is not liable for any losses or damages resulting from the use of this information.)

(Metrobank Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)