Share prices seen to sync with GCash, BSP moves

MANILA, Philippines — The local stock market is expected to take its cue from two catalysts this week: the highly-anticipated market debut of GCash parent Mynt Inc. and the upcoming policy decision of the Bangko Sentral ng Pilipinas (BSP).

The Philippine Stock Exchange index (PSEi) capped off last week with two straight wins, settling at 5,782.70, with broad-based buying lifting market sentiment.

Week-on-week, the PSEi gained by 1.43 percent.

Unicapital Securities head of research Wendy Estacio-Cruz said investors are looking ahead to September balance of payments data on Oct. 19 and the BSP’s Oct. 22 policy decision for direction on foreign exchange flows and interest rates.

“We expect near-term trading to take its cue from the BSP’s policy decision and guidance, with investors looking for signs that inflation and currency pressures can be contained without further weakening growth,” she said.

Philstocks Financial research manager Japhet Tantiangco said expectations that the BSP would raise policy rates by another 25 basis points is currently mounting following the latest inflation print which came in at 7.2 percent.

“Said expectations are expected to weigh on the market. A rate hold would be deemed as a positive surprise while a rate hike more than 25 basis points would be deemed as a negative surprise for the market,” he said.

2TradeAsia.com, meanwhile, said a strong market debut for GCash could lift sentiment briefly.

Mynt is slated to debut on the Philippine Stock Exchange under the ticker symbol GCASH tomorrow.

Moving forward, Tantiangco said the market may continue to test the 5,800 level.

He said positive signals have formed recently from the market’s crossing of the 10-day exponential moving average to the rise of its MACD (moving average convergence/divergence) line above the signal line.

“Its 14-day relative strength index is also moving upwards. However, value turnover is low which implies that the rally is fragile and could reverse anytime,” he said.