PSEi seen range-bound ahead of mega IPOs

Local stocks may continue to trade within a narrow range this week as investors reposition portfolios amid easing oil prices, lingering concerns over interest rates and preparations for a wave of large stock offerings expected to hit the market.

In its latest market outlook, F. Yap Securities said the benchmark Philippine Stock Exchange Index (PSEi) could move between 5,820 and 6,150 as investors selectively accumulate large-cap stocks while waiting for fresh catalysts.

The brokerage said expectations for a firmer US-Iran peace agreement and the recent decline in fuel prices had improved prospects for domestic consumption, helping support sentiment toward local equities.

Still, the market remains vulnerable to liquidity concerns as investors prepare for upcoming landmark listings, including the planned initial public offerings of Mynt and Vitro REIT, which could collectively raise around P120 billion.

According to F. Yap Securities, institutional investors may fund participation in these offerings by rotating out of existing midcap holdings, creating an overhang on the broader secondary market.

Meanwhile, Philstocks Financial Inc. research manager Japhet Tantiangco said catalysts are yet to be seen.

Without any positive developments, he said the market remains without a driving force that could help sustain a rally.

The brokerage also warned that tighter monetary conditions could continue to weigh on trading activity. It expects the Bangko Sentral ng Pilipinas (BSP) to maintain a restrictive stance.

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“The BSP is trapped; it cannot cut rates to support local valuations without triggering a rapid depreciation of the peso toward 63 to the dollar,” it said.

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