Stock Market Weekly: Favorable domestic indicators

WHAT HAPPENED LAST WEEK

The Philippine Stock Exchange index (PSEi) declined by 0.37% to close at 6,315.93 (-23.4 points), as investors weighed a complex mix of global and domestic catalysts. Market sentiment took a hit following US President Donald Trump’s announcement of a 100% tariff on semiconductor exports, which raised concerns for the Philippines’ electronics industry, the country’s top export in 2024. The downside was partially cushioned by a 90-day extension of the US-China tariff truce and a steady US July inflation print at 2.7%, reinforcing expectations for a potential Fed rate cut at the August 21 meeting of the Federal Open Market Committee (FOMC). Locally, portfolio repositioning ahead of the PSEi rebalancing (effective August 18, 2025) added pressure, with Bloomberry Resorts Corporation (BLOOM) set to exit and DigiPlus Interactive Corp. (PLUS) to join the index. This technical adjustment drove selective volatility across constituents.

WHAT TO EXPECT THIS WEEK

This week, the PSEi is expected to trade sideways with a modest upward tilt, supported by favorable domestic indicators. Philippine cash remittances rose 3.1% year-on-year (y/y) in the first six months of 2025 to USD16.75 billion, while the peso strengthened 0.82% week-on-week (w/w) to PHP 56.73, lending tailwinds to consumption and sentiment.

Globally, attention will center on the August 21, US Fed meeting, where the steady July CPI print bolsters the case for policy easing. Geopolitical risks remain in focus, with markets monitoring US President Donald Trump’s meeting with Ukrainian President Volodymyr Zelensky, following last week’s talks with Russian President Vladimir Putin. Speculation around a trilateral summit adds a layer of uncertainty.

Resistance: 6,300/6,400

Support: 6,200

ANALYSIS

The PSEi slipped 0.37% w/w to 6,315.93 (-23.40 points), consolidating within a descending triangle pattern. While the index has managed to hold above the 6,200-support level, it continued to print lower highs, signaling fading bullish momentum. Furthermore, the main index fell below all key moving averages, reinforcing a cautious technical backdrop. Unless the index breaks above the triangle resistance with conviction, the broader trend is likely to remain sideways to bearish, with a risk of breakdown if the 6,200 support fails.

STOCK CALLS FOR THE WEEK

Robinsons Land Corp. (RLC) – BUY ON PULLBACK | FMSEC TARGET PRICE: PHP 16

RLC appears to be in an uptrend, trading above its 20-day, 50-day, 100-day, and 200-day moving averages (MA). The 20-day MA is currently serving as the immediate support, which the stock could revisit if the pullback continues. Meanwhile, with the RSI hovering at 66, the stock is approaching overbought levels. A healthy retracement toward the 20-day MA could offer a better opportunity for accumulation. Accumulating once RLC pulls back near the 20-day MA near PHP 14.70 is advised. Take profits at PHP 16.90 and set stop loss limits below PHP 13.52.

Bloomberry Resorts Corp. (BLOOM) – BUY | CONSENSUS TARGET PRICE: PHP 7

BLOOM has broken below support levels PHP 4.0 and PHP 3.4, trading below key moving averages (50-day, 100-day, and 200-day). Momentum indicators signal strong downward pressure, with RSI hovering at oversold levels. Nevertheless, we see tomorrow’s rebalancing activities as an opportunity to accumulate the counter at attractive levels, taking advantage of excess selling pressure. Accumulating BLOOM at PHP 3.60 is advised. Take profits once BLOOM rises by 15% above entry point, and cut loss if share price drops 8% lower.

Manila Water Company, Inc. (MWC) – BUY ON SUPPORT | CONSENSUS TARGET PRICE: PHP 45.00

MWC has broken above its PHP 40.00 key resistance level and is trading above all key moving averages (20-day, 50-day, 100-day, and 200-day), indicating bullish momentum. The MACD has also crossed above the signal line, supporting the bullish trend. However, with the RSI reaching overbought levels, MWC might be due for a pullback. Accumulating MWC around the support level at PHP 40.00 is advisable. Take profits at PHP 46.00 and set stop loss limits at PHP 36.80.

KEY DATA RELEASES

1. US FOMC Minutes on Thursday, August 21, 2025

2. US Initial Jobless Claims for August 2025 on Thursday, August 21, 2025 (estimates: 227K; previous: 224K)

3. US S&P Global Manufacturing PMI Flash for August 2025 on Thursday, August 21, 2025 (previous: 49.8).

(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.)