PSEi slated for modest gains on rate cut bets
Investors’ anticipation of rate cuts may provide some boost to the capital index this week, though economic and political concerns could limit gains.
Toby Allan Arce, head of sales trading at Globalinks Securities and Stocks Inc., expects the Philippine Stock Exchange Index (PSEi) to trade with “a cautiously optimistic tone” as they await monetary policy moves from the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve.
Arce said the bourse could trade between 5,850–6,050 range.
“Investors are likely to remain selective and defensive — rotating toward fundamentally strong, dividend-paying blue chips,” he said.
The BSP and the Fed are seen to further slash rates this week, particularly the local monetary authorities, following the weak economic performance of the Philippines in the last quarter.
The country also logged a cooler inflation rate in November, giving the BSP more room to implement a new rate reduction with hopes of improving household spending and economic activities.
“With the PSEi recently reclaiming the 5,800–6,000 zone amid improving sentiment, next week’s twin rate meetings could determine whether the market sustains its nascent recovery or encounters another bout of profit-taking,” Arce said.
“However, investors are also aware that these policy moves will occur against a backdrop of weakening global growth, a fragile peso and lingering governance concerns domestically — factors that may temper enthusiasm and cap upside momentum,” he added.
