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PHL stocks to take cue from BSP, Fed meetings

STOCK MARKET investors are expected to keep a close eye on the policy meetings of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) this week.

The benchmark Philippine Stock Exchange index (PSEi) lost 82.06 points or 1.32% to end at 6,126.34 on Friday, while the broader all shares index slipped by 33.13 points or 0.98% to 3,320.18.

Week on week, the PSEi went down by 96.60 points or 1.55% from its close of 6,222.94 on Sept. 8.

“Hopes that both the Fed and the BSP will keep their policy rates unchanged may somehow give market sentiment a boost,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message. 

“Dovish signals are seen to lift the market while hawkish signals may pull the market down.”

The Federal Open Market Committee (FOMC) is widely expected to keep rates unchanged at the end of its two-day policy meeting on Sept. 20. The US central bank raised borrowing costs by 25 basis points (bps) in July, bringing the Fed Funds target rate at 5.25% and 5.5%.

Meanwhile, the Monetary Board (MB) is scheduled to hold a policy-setting meeting on Thursday. The MB has kept rates unchanged at a near 16-year high of 6.25% during its last three meetings.

BSP Governor Eli M. Remolona, Jr. on Thursday said a policy rate hike is unlikely despite the uptick in August inflation.

A BusinessWorld poll last week showed 14 of 17 analysts see the Monetary Board keeping benchmark rates steady, while three analysts expect a 25-bp rate hike.

“Post-monetary policy meeting price action could drive longer-term trend. We may see the market start (this week) with gains, given the removal of selling pressure from FTSE (Financial Times Stock Exchange) rebalancing-related flows,” China Bank Securities Corp. Research Associate Lance U. Soledad said in an e-mail on Friday.

Mr. Tantiangco said investors may also take their cues from the release of the BSP’s Business and Consumer Expectations Surveys on Friday.

For the rest of the week, Mr. Soledad said volatility is expected to be elevated ahead of and following the FOMC and the MB’s policy meetings.

“Should we see upbeat price action after these key events, then that could indicate that a near-term trough had been reached and could significantly improve buying appetite — warranting more active accumulation in index heavyweights,” Mr. Soledad said.

The PSEi is expected to test the 6,150 level.

“If the market is able to get back above the said line, it is seen to continue trading within 6,150-6,400. If it fails to do so, however, the market’s new trading range is seen from 6,000-6,150,” Mr. Tantiangco said.

For this week, Mr. Soledad placed PSEi’s resistance at 6,350-6,370. — S.J.Talavera   

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Stocks up on bargain hunting, Fed pause hopes

PHILIPPINE SHARES rose on Thursday on bargain hunting and as markets expect the US Federal Reserve to keep rates steady next week, even after US consumer inflation picked up in August.

The benchmark Philippine Stock Exchange index (PSEi) went up by 59.22 points or 0.96% to end at 6,208.40 on Thursday, while the broader all shares index increased by 22.50 points or 0.67% to close at 3,353.31.

“Stocks rebounded as bargain hunters came in when the local equities market became technically oversold,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

“Aiding market sentiment was the hope that the US Fed is unlikely to raise their benchmark rate this month. This, despite higher August inflation reported last night,” he added.

Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message that investors saw bargain-hunting opportunities after the PSEi dropped to the 6,100 level on Wednesday.

“Helping in the climb were the expectations that the Federal Reserve would keep policy rates unchanged in its next meeting after the US August core inflation rate continued to decline to 4.3% from 4.7% in the preceding month,” he said.

US consumer prices increased by the most in 14 months in August as the cost of gasoline surged, but the annual rise in underlying inflation was the smallest in nearly two years, likely giving the Federal Reserve cover to leave interest rates unchanged next Wednesday, Reuters reported.

The mixed report from the Labor department on Wednesday was published a week before the Fed’s policy meeting and followed data this month showing an easing in labor market conditions in August. Economists, however, believe officials at the US central bank will continue to signal an additional rate hike this year given the stickiness in services inflation.

The US CPI went up by 0.6% in August after rising by 0.2% in the last two months.

In the 12 months through August, consumer prices picked up by 3.7% after rising by 3.2% in July.

“At home, many cheered the local banking industry’s nonperforming loan ratio for July as it remained steady at 3.43% on a month-on-month basis and was lower than the same period of last year’s 3.57% despite a high interest rate environment,” Mr. Plopenio added.

All sectoral indices went up on Thursday. Holding firms rose by 84.75 points or 1.44% to 5,942.05; mining and oil climbed by 108.42 points or 1.04% to 10,502.07; services went up by 14.14 points or 0.93% to 1,523.15; property increased by 19.99 points or 0.78% to 2,566.62; financials gained 5.68 points or 0.31% to end at 1,795.72; and industrials added 26.23 points or 0.29% to close at 8,843.82.

Value turnover declined to P3.81 billion on Thursday with 411.99 million shares changing hands from the P4.73 billion with 740.94 million issues seen on Wednesday.

Decliners and advancers ended at 92 each, while 35 names closed unchanged.

Net foreign selling dropped to P11.74 million on Thursday from P436.53 million on Wednesday. — SJT with Reuters

#Stocks #bargain #hunting #Fed #pause #hopes

Stocks inch down on weak volume before US CPI

STOCKS dropped on Tuesday amid weak trading volume as investors stayed on the sidelines ahead of the release of August US consumer inflation data, which could influence the US Federal Reserve’s policy decision this month.

The Philippine Stock Exchange index (PSEi) went down by 3.54 points or 0.05% to end at 6,230.20 on Tuesday, while the broader all shares index dropped by 4.02 points or 0.12% to close at 3,359.43.

“Market continues to trade sideways with low volume as investors await the economic reports this week by the US government. The result of the reports will give the clearer picture whether the Fed will continue to increase or make a pause on the interest rate,” Mercantile Securities Corp. Head Trader Jeff Radley C. See said in a Viber message.

Value turnover went up to P3.97 billion on Tuesday with 535.63 million shares changing hands from the P3.62 billion with 639.89 million issues seen on Monday.

“The market was initially trading in the green boosted by the anticipation that the Federal Reserve will keep its policy rates unchanged,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar likewise said in a Viber message.

August US consumer price index (CPI) data will be released on Wednesday.

The US CPI rose 0.2% in July, matching June’s gain. On an annual basis, the CPI advanced by 3.2%.

The Fed will hold its policy meeting on Sept. 19-20.

The US central bank raised borrowing costs by 25 basis points (bps) in July, bringing its target rate to a range between 5.25% and 5.5%.

It has hiked rates by 525 bps since it began its tightening cycle in March last year.

“The local bourse experienced a slight dip… as investors took profits on the last minute following its two-day rally. Also, the sentiment was further dampened by the lower FDI (foreign direct investments) net inflows recorded in June,” Ms. Alviar added.

FDI net inflows declined by 3.9% to $484 million in June from $503 million in the same month in 2022, central bank data released on Monday showed. This was also 0.6% lower than the $487-million FDI net inflows in May.

For the first half of the year, FDI net inflows dropped by 20.4% to $3.9 billion from $4.9 billion a year ago.

Sectoral indices were split on Tuesday. Services dropped by 15.38 points or 1% to 1,522.72; holding firms declined by 31.77 points or 0.53% to 5,948.01; and property went down by 2.44 points or 0.09% to 2,583.69.

Meanwhile, mining and oil rose by 122.17 points or 1.19% to 10,389.13; financials climbed by 15.27 points or 0.85% to 1,803.53; and industrials went up by 30.71 points or 0.34% to 8,940.87.

Decliners outnumbered advancers, 95 to 79, while 61 names closed unchanged.

Net foreign selling rose to P961.49 million on Tuesday from P504.93 million on Monday. — S.J. Talavera

#Stocks #inch #weak #volume #CPI

Stocks may move sideways before US CPI data

PHILIPPINE SHARES are expected to move sideways this week before the release of US inflation data, which could affect the US Federal Reserve’s next move.

The Philippine Stock Exchange index (PSEi) gained 39.87 points or 0.64% to end at 6,222.94 on Friday, while the broader all shares index went up by 13.24 points or 0.39% to 3,360.23.

Week on week, the PSEi rose by 41.88 points or 0.68% from its close of 6,181.06 on Sept. 1.

For this week, analysts said the PSEi may move within a tight range ahead of the release of US consumer inflation data on Sept. 13.

“This week, we could see the index continue its rangebound pattern within the 6,150 to 6,350 area, with investors taking a more cautious stance ahead of the release of US August inflation data,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

“A higher-than-expected rise in US consumer prices would be unwelcome news for equities market as it would pile pressure on the Federal Reserve to raise interest rates and prolong a hawkish monetary policy,” he added.

Faster US consumer inflation could affect trading activity, China Bank Securities Corp. Research Director Rastine Mackie D. Mercado likewise said in an e-mail on Friday.

“We may see muted buying appetite this week should the US inflation print come in faster than expected, and as investors adopt a cautious stance ahead of the Fed’s policy meeting on Sept. 19-20,” Mr. Mercado said.

The US consumer price index (CPI) rose 0.2% in July, matching June’s gain, Labor department data showed. On an annual basis, the CPI advanced by 3.2%.

US Federal Reserve Chair Jerome H. Powell said in the annual Jackson Hole Economic Policy Symposium last month that the central bank may need to raise interests further to cool still-too-high inflation, Reuters reported.

The Fed raised interest rates by 25 basis points (bps) in July, bringing its benchmark overnight rate to 5.25-5.5%.

The US central bank has hiked borrowing costs by a total of 525 bps since it started tightening cycle in March 2022.

Another trading driver for this week is the FTSE rebalancing on Friday, Sept. 15, Mr. Colet said.

“What investors are eagerly awaiting is a significant catalyst that can boost trading activity in the market. Nonetheless, we are closely watching the dollar’s resurgence, spurred by recent developments in the United States,” Globalinks Securities and Stocks, Inc. Senior Trader Mark V. Santarina said in a Viber message.

The US dollar index registered an eighth straight week of gains on Friday while global stock indexes ended slightly higher on the day ahead of key US inflation data this week, Reuters reported.

For this week, Mr. Mercado placed the PSEi’s support at 6,150. — S.J. Talavera with Reuters

#Stocks #move #sideways #CPI #data

Stocks to move sideways before inflation report

PHILIPPINE STOCKS may move sideways this week ahead of the release of August inflation report and amid hopes that the US Federal Reserve is done hiking rates following soft US data that came out last week.

The Philippine Stock Exchange index (PSEi) inched up by 0.09 point or 5.81% to close at 6,181.06 on Friday, while the broader all shares index went up by 0.21 point or 7.19% to 3,341.97.

Week on week, the PSEi also gained 20.45 points or 0.33% from its close of 6,160.61 on Aug. 25.

For this week, trading will be driven by economic data, analysts said.

“This week’s market direction will be shaped by investors’ reaction to the latest US jobs report, China’s efforts to prop up its economy, and the Philippine August inflation print,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail.

The market’s movement will be affected by US and local data releases, China Bank Capital Corp. Managing Director Juan Paolo E. Colet likewise said in a Viber message.

“Domestic inflation data for August will be top of mind for most investors. The expectation is that this will be higher than July’s 4.7%, but a steep jump could introduce fresh volatility to the market,” Mr. Colet said.

US job growth picked up in August, but the unemployment rate jumped to 3.8% and wage gains moderated, suggesting that labor market conditions were easing and cementing expectations that the Federal Reserve will not raise interest rates this month, Reuters reported.

The economy created 110,000 fewer jobs than previously reported in June and July, which some economists said suggested there had been business closures that were not previously captured.

The labor market is slowing in response to the US central bank’s hefty rate hikes to cool demand in the economy.

Meanwhile, a BusinessWorld poll of 18 analysts yielded a median estimate of 4.9% for August Philippine headline inflation, close to the lower end of the central bank’s 4.8% to 5.6% forecast for the month.

If realized, this would be faster than the 4.7% print in July, but lower than the 6.3% seen in August 2022.

It would mark the 17th straight month of inflation exceeding the Bangko Sentral ng Pilipinas’ 2-4% target for the year.

August inflation data will be released on Sept. 5, Tuesday.

“We also see the index possibly retesting the 6,150 support level after last week’s oversold rally fizzled out. A successful retest of a support level is an important indicator that the recent downtrend could be reaching a trough,” Mr. Mercado said.

For this week, Mr. Mercado placed the PSEi’s support at 6,150 and resistance at 6,370-6,420, while Mr. Colet put support at 6,150 and resistance at 6,350. — S.J. Talavera with Reuters

#Stocks #move #sideways #inflation #report