Stock Market Weekly: Modest upside expected

WHAT HAPPENED LAST WEEK

The Philippine Stock Exchange index (PSEi) closed the week higher at 6,264.49 up by 2.54% week-on-week (w/w) or 155.28 points, buoyed by optimism following the much-anticipated 25-basis-point (bp) rate cut by the US Fed, which lifted investor sentiment.

This development gives the Bangko Sentral ng Pilipinas (BSP) greater flexibility to sustain its policy easing, opening the door for at least one more rate cut within the year to further support economic growth.

Meanwhile, cash remittances grew 3% year-on-year (y/y) in July 2025, the highest since December 2024, as overseas Filipino workers (OFWs) remitted more funds amid heavy monsoon rains and floods. This brought cumulative inflows for January to July 2025 to a 3.1% y/y increase, slightly above the BSP’s expectation.

WHAT WE CAN EXPECT

This week, we expect the local bourse to trade sideways with a modest upward tilt as investors continue to digest US Fed’s decision to cut rates.

However, gains may be capped as sentiment could be dampened by another round of oil price hikes this week of up to PHP 1.00 to PHP 1.20 per liter for gasoline and PHP 0.60 to PHP 0.80 per liter for diesel, marking the fifth straight week of increases.

Moreover, investor concerns are expected over proposed increases in H-1B visa application fees for skilled workers entering the US, which could dampen demand for professional immigrant labor and, in turn, weigh on remittance flows to the Philippines.

Resistance: 6,400 / 6,300

Support: 6,200 / 6,100

ANALYSIS

The PSEi increased by 2.54% w/w to 6,264.49 (+155.28 points), breaking above the 6,200 level midweek.

The index also crossed above the 20-day moving average (MA) and is poised to retest the 50-day MA, signaling improving momentum.

While sentiment appears to have turned positive, sustained weakness could drag the benchmark back below the 6,200 support zone.

STOCK CALLS FOR THE WEEK

MREIT, Inc. (MREIT) | BUY | FMSEC TARGET PRICE: PHP 15.10

MREIT is nearing its immediate support at PHP 13.40 after a 6.72% w/w decline, largely driven by its recent block sale which was priced at a discount.

While the stock has dipped below key moving averages (20-day, 50-day), technical indicators show potential for a rebound, with the RSI in deeply oversold territory.

We believe the stock may be poised for recovery once selling pressure eases.

Accumulating MREIT at current levels around PHP 13.60–13.40 is advisable. Take profits at PHP 14.96 and set a stop loss limit at PHP 12.92.

SM Investments Corp. (SM) | BUY ON BREAKOUT | FMSEC TARGET PRICE: PHP 1,030.00

SM continues to trend lower, testing its 52-week low at PHP 740 after consistent lower highs and lower lows since late 2024.

The stock is trading below its 20-day and 50-day moving averages, confirming sustained bearish momentum, with the RSI affirming its oversold condition.

In the near term, bias remains bearish, and we recommend accumulating once SM reclaims PHP 810 (50-day MA).

Aggressive investors may consider entering earlier on a decisive break above PHP 760 (20-day MA).

Accumulating SM once it breaks above PHP 760 or PHP 810 is advisable. Take profits 10% above entry price and set stop loss limits 5% below entry price.

Puregold Price Club, Inc. (PGOLD) | BUY ON PULLBACKS | FMSEC TARGET PRICE: PHP 49.00

PGOLD has been sustaining its uptrend, trading above its 20-day, 50-day, 100-day, and 200-day moving averages (MA).

Momentum indicators remain balanced, with the RSI in neutral territory. The MACD line has crossed below the signal line, which hints of a short-term pullback. However, since the MACD remains in positive territory, the broader upward bias is intact.

This setup suggests that any near-term weakness may present a healthy entry opportunity for the stock. Accumulating on pullbacks is advisable. Take profit at PHP 46.5 and set stop loss limit at PHP 40.2.

KEY DATA RELEASES

1. US S&P Global Manufacturing Purchasing Managers’ Index (PMI) for September 2025 on Tuesday, September 23, 2025 (previous: 53; estimates: 51.6)

2. PH Budget Balance for August 2025 on Wednesday, September 24, 2025 (previous: -PHP 18.9 billion)

3. US GDP annualized quarter-on-quarter (q/q) for 2Q 2025 on Thursday, September 25, 2025 (estimates: 3.3%: 2Q 2025: 3.3%)

4. US Initial Jobless Claims as of September 20, 2025, on Thursday, September 25, 2025 (previous: 231k; estimates: 240k)

5. PH Business Confidence for 3Q 2025 on Friday, September 26, 2025 (previous: 28.8)

6. PH Consumer Confidence for 3Q 2025 on Friday, September 26, 2025 (previous: -14)

7. US Core PCE Price Index y/y for August 2025 on Friday, September 26, 2025 (previous: 2.9%; estimates: 2.9%)

(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.)