Stock Market Weekly: Possible bargain hunting on the horizon

WHAT HAPPENED LAST WEEK

The local bourse ended a volatile trading week in the green, rising by 0.53% week-on-week (w/w) to close at 6,339.38 (+33.25 points). The market started the week on a strong footing, taking cues from a stronger peso, robust earnings from key index heavyweights, and a cooler-than-expected inflation print of 0.9% (estimates: 1.2%) for July 2025.

However, despite a faster-than-expected GDP result of 5.5% (estimates: 5.4%), gains tapered late in the week as trade tensions escalated following US President Donald Trump’s order to increase tariffs on pharmaceutical products, semiconductors, and Indian goods. Meanwhile, investors also digested the results of the MSCI Quarterly Index Review for August 2025, wherein the Philippines endured a minimal downweight (-0.002%).

The MSCI Phils Standard Index saw no changes in constituents, while Philippine National Bank (PNB) and RL Commercial REIT, Inc., (RCR) will be replacing D&L Industries Inc. (DNL) in the MSCI Phils Small Cap Index. All changes will be made as of the close of August 26, 2025 (effective August 27, 2025).

WHAT TO EXPECT THIS WEEK

We see the market trading sideways with a slight upward bias on potential bargain hunting. Throughout the week, the market will digest a slew of PSEi earnings announcements as well as the results of the PSEi August semi-annual review, wherein DigiPlus Interactive Corp. is set to replace Bloomberry Resorts Corp. (BLOOM).

Volatility could emerge on Friday as funds align their portfolios to the changes. On the foreign front, investors will closely monitor US inflation results for July 2025, which could influence rate cut expectations in September. Moreover, we remain mindful of further trade escalation potentially spurring risk-off sentiment and selling pressure.

Resistance: 6,400 / 6,600

Support: 6,100 / 6,300

ANALYSIS

The PSEi nudged higher by 0.53% w/w to 6,339.38 (+33.25 points), rebounding from the 6,300-support level and reclaiming its position above the 100-day moving average. However, trading volume remains subdued, with recent rallies showing weak follow-through and momentum fading amid lower highs. Unless the index decisively breaks above 6,500, the broader trend is expected to remain sideways with a downward bias.

STOCK CALLS FOR THE WEEK

Robinsons Land Corp. (RLC) | BUY ON PULLBACKS | FMSEC TARGET PRICE: PHP 16.00

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.

Ayala Land, Inc. (ALI) | BUY ON PULLBACKS | FMSEC TARGET PRICE: PHP 35.00

ALI has broken out of its downtrend channel and is now trading above all key moving averages (20-day, 50-day, 100-day, and 200-day), signaling renewed interest in the stock. The MACD has recently crossed above the signal line, while the RSI is nearing overbought levels, reinforcing the bullish momentum. However, given potential fundamental headwinds, we believe there is still room for a pullback, offering a more favorable risk-reward setup. Accumulating ALI once it pulls back near the 200-day MA at PHP 26.00 is advisable. Take profits at PHP 29.90 and set stop loss limit below PHP 23.92.

Manila Electric Company (MER) | BUY ON SUPPORT | CONSENSUS TARGET PRICE: PHP 541.83

MER is consolidating between PHP 560.00 and PHP 530.00, trading below key moving averages (20-day, 50-day, and 100-day), reflecting near-term weakness. However, it remains in a long-term uptrend as it continues to hover above the 200-day MA. The MACD is slightly above the signal line but appears positioned to cross below, and while the RSI remains in neutral

territory, it may begin to track the weakness in both the MACD and MAs. Accumulating near the support level may offer a favorable entry point. Accumulating MER around the support level at PHP 530.00 is advisable. Take profits at PHP 609.50 and set stop loss limit at PHP 487.60.

KEY DATA RELEASES

1. US Inflation Rate year-on-year (y/y) for July 2025 on Tuesday, Augst 12, 2025 (estimates: 2.8%; previous: 2.7%)

2. US Producer Price Index (PPI) month-on-month (m/m) for July 2025 on Thursday, Augst 14, 2025 (estimates: 0.2%; previous: 0%)

3. PH Cash Remittances y/y for June 2025 on Friday, August 15, 2025 (previous: USD 2.7 billion)

(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.)