Still no room for PSEi to move up

The shortened trading week ahead is not looking too bright for the local bourse, especially with the Bangko Sentral ng Pilipinas (BSP) expected to keep a tight monetary policy given the faster inflation rate in March. The benchmark Philippine Stock Exchange Index (PSEi) last week stayed in the red for four out of five trading days as the accelerated 3.7-percent March inflation rate rattled investors.

Philippine shares dipped below the 6,800 level for the first time in nearly two months on Friday. While bargain-hunting investors may possibly lift the benchmark index after prices fell last week, Philstocks Financial Inc. research manager Japhet Tantiangco remained cautious.

“With the bearish factors at play, and the lack of a positive catalyst, we may not see a strong rally yet from the market. A further decline for the bourse is still possible,” Tantiangco said. Investors are watching out for the results of the BSP’s policy meeting today, April 8. Prolonged monetary tightening is expected to dampen sentiment, according to Tantiangco.

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Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the central bank may match the US Federal Reserve’s rate pause last month “in order to maintain healthy interest rate differentials to help support/stabilize the peso exchange rate, import prices and overall inflation.”