PSEi seen range-bound as rate decisions loom
Investors may need to stay on the sidelines for now as the Philippine stock market awaits key policy decisions from the Bangko Sentral ng Pilipinas (BSP) and the United States Federal Reserve (US Fed), according to brokerage F. Yap Securities Inc.
In its latest market outlook, the brokerage said the benchmark Philippine Stock Exchange Index (PSEi) is likely to remain range-bound until the outcome of the two central bank meetings becomes clearer.
The company said support for the PSEi remains near the 5,750 to 5,800 range, while a more hawkish outcome from either central bank could open the door for a retest of last year’s lows.
“The market’s next direction hinges on two policy calls—BSP on June 18 and the US Fed on June 16-17,” F. Yap Securities said.
It noted that consensus expectations point to a 25-basis-point rate cut from the BSP while the Fed is expected to keep interest rates unchanged.
The brokerage advised investors to “observe, then commit,” saying market participants should wait for the decisions before taking aggressive positions.
The PSEi ended the shortened trading week at 5,910.06, down 0.48 percent week-on-week.
F. Yap Securities said selling pressure dominated trading as renewed hostilities involving Iran and persistent inflation concerns dampened sentiment.
Looking ahead, the brokerage said investors face a “critical crossroads” as policymakers weigh inflation risks against slowing economic growth.
The company said a 25-basis-point BSP rate cut would be the least disruptive outcome for financial markets, although it warned that inflation pressures from construction costs, services, rents and electricity rates could complicate the central bank’s policy path.
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