Inflation, weak peso to keep stocks on edge
Philippine stocks may remain volatile this week as investors weigh lingering inflation risks and a vulnerable peso, with F. Yap Securities Inc. seeing better opportunities in the mining sector.
In its outlook for Sept. 7 to Sept. 11, F. Yap Securities said the slower August inflation print offered some relief, but cautioned against assuming that price pressures were already easing for good.
Philstocks Financial Inc. research manager Japhet Tantiangco said chartwise, the market was still considered to be on a downtrend that started in late July.
“Currently, the market’s trading range is seen from 6,000 to 6,150,” Tantiangco said.
Headline inflation slowed to 6.1 percent in August from 6.2 percent in July, slightly better than the brokerage’s 6.2-percent forecast.
F. Yap Securities said broad-based price freezes in key regions may have helped keep prices artificially stable.
Crop damage and monsoon disruptions may also take time to fully show up in consumer prices.
It noted that vegetable prices were estimated to have jumped by 15 percent to 20 percent month on month in key agricultural hubs in recent weeks.
As price caps expire through September and October, supply pressures could spill into succeeding inflation data, it added.
The peso is another key risk for equities.
F. Yap Securities expects the local currency to remain vulnerable despite the Bangko Sentral ng Pilipinas raising its policy rate to 5 percent.
It said the BSP’s commentary around the rate hike leaned dovish, supporting its view that the current rate could mark the end of the tightening cycle.
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