PSEi faces GCash debut, BSP policy test
Local stocks face a test this week as investors weigh GCash parent Mynt Inc.’s market debut against a possible Bangko Sentral ng Pilipinas (BSP) interest rate hike amid peso weakness and persistent inflation risks.
F. Yap Securities Inc. said the Oct. 20 listing and the BSP’s Oct. 22 policy meeting would be the main drivers of trading.
“A strong debut could lift sentiment briefly, but we would not chase it ahead of the rate decision,” the brokerage said in its outlook for Oct. 19 to Oct. 23.
F. Yap expects a 25-basis-point BSP rate increase, saying the move is largely priced in. It cited pressure on the peso and renewed expectations of a US Federal Reserve hike following hotter US inflation.
The brokerage expects the index to remain above 5,500 if the BSP delivers the anticipated increase.
It warned, however, that holding rates steady amid currency weakness could reverse the rebound and test support at 5,700. A larger 50-basis-point increase could put 5,600 in play.
Oil prices remain another source of uncertainty. F. Yap said Middle East supply disruptions, combined with peso weakness, could sustain inflation pressure.
El Niño’s potential effects on food prices add to those risks.
Third-quarter bank earnings will also draw attention. The brokerage said investors should examine provisions, asset quality and loan demand, as higher credit costs could offset gains from lending margins.
F. Yap maintained a cautious stance, favoring dollar earners and well-capitalized banks.
For Philstocks Financial Inc. research manager Japhet Tantiangco, chartwise, the PSEi managed to rally last week but fell short of taking its 5,800 resistance level.
******
Get real-time news updates: inqnews.net/inqviber
