‘Market to sustain momentum this week’

MANILA, Philippines — The local stock market is seen sustaining its positive momentum this week, with investors keeping a close watch on June inflation.

The Philippine Stock Exchange index went on a three-day rally last week, ending at 6,188.03 last Friday.

Week-on-week, the benchmark index improved by 1.9 percent, driven primarily by the declining global oil prices and the Philippines moving to the upper-middle income status.

Philstocks Financial research manager Japhet Tantiangco said trading, however, was thin reflecting tepid market confidence as uncertainties remain.

This week, Tantiangco said eyes are expected to be on the country’s June inflation, which Philstocks estimates to come in at 6.5 percent.

“If inflation exhibits a decline from the prior month’s 6.8 percent, we may see a positive reaction from the local bourse,” he said.

Tantiangco said investors are also seen continuing to monitor negotiations between the US and Iran, noting that the situation is seemingly subdued so far.

“This in turn has calmed oil prices, somehow giving us a relief with our inflation outlook. However, no permanent resolution has been established between the two yet. Hence, uncertainties remain,” Tantiangco said.

“While the market’s attractive level coupled with the recent positive developments and upward momentum entices bargain hunting, investors are still advised to maintain caution as downside risks remain,” he said.

2TradeAsia.com, meanwhile, believes the market is poised to rise with expectations of tamer consumer prices.

The online arm of F. Yap Securities Inc. said expectations of tamer consumer prices in June will support follow-through buying, adding that a June print below May (6.8 percent) should help the PSEi sustain its short-term push toward 6,200 to 6,400.

2TradeAsia.com said next catalysts will also be on first half corporate results.

“With the onset of first half corporate earnings releases, local banks are seen to be the preferred core-plus pay, with earnings anchored on robust net interest margins and write-backs of conservative provisions,” it said.