PSEi seen consolidating near 6,500
Philippine stocks may consolidate near the 6,500 level this week after a broad-based rally fueled by bargain hunting in index heavyweights and rate-sensitive names, according to brokerage 2TradeAsia.
The Philippine Stock Exchange Index climbed 116 points, or 1.84 percent week-on-week, to close at 6,464.41, led by mining and oil stocks, which surged 6.42 percent, and holding firms, up 3.4 percent.
Average daily turnover improved to P6.97 billion, up 3.6 percent from the previous week. Net foreign buying strengthened sharply to P609 million, a 141-percent jump, indicating improved offshore participation.
Market breadth remained positive, with advancers outpacing decliners 110 to 93.
2TradeAsia said sentiment was supported by expectations of a potential policy rate cut by the Bangko Sentral ng Pilipinas as early as February, with market speculation pointing to a 25- to 50-basis-point reduction.
A more conservative scenario of a 0- to 25-basis-point cut early in the year remains in play, given that current rates are already near their expected peak.
The brokerage likewise noted that Philippine equities continue to trade at compelling valuations.
The PSEi at sub-10 forward price-to-earnings levels, among the lowest in the region, favored a strategy focused on deep-value and defensive names, particularly banks and consumer staples.
For Toby Allan Arce, head of sales trading at Globalinks Securities and Stocks Inc., this week’s tone is expected to remain constructive but measured.
“On balance, the PSEi may continue to grind higher but with intermittent pullbacks, as investors navigate between optimism over easing conditions and caution over lingering external risks,” Arce said.
For the near term, the index is expected to consolidate as it tests overhead supply.
