Investors and traders will be inclined to watch for positive developments in the trade war between China and the US for a clearer direction in trading this week.
On Friday, April 25, the benchmark PSEi closed higher by 134.13 points or 2.18 percent at 6,268.75, from 6,134.62 a week earlier on April 16, Wednesday when the market had a short trading week for Lent.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp, said the PSEi on Friday regained its losses since President Trump announced reciprocal tariffs on April 2, 2025.
In the year to date, the PSEi level on Friday, April 25, was still down 3.98 percent.
“Positive developments mainly in trade negotiations are expected to boost market sentiment,” Japhet Tantiangco, an analyst for online stock brokerage Philstocks Financial Inc., said.
“A lack of such may cause investors to exit the bourse,” he added.
Over the weekend, it was reported that China was exempting some US imports from its 125 percent retaliatory tariffs, asking businesses for a list of critical goods they need to be levied free. The market saw this as a sign of potential de-escalation in the trade war with the US.
Reuters reported a list of 131 categories of products said to be under consideration for tariff exemptions circulated on Chinese social media platforms and among some businesses and trade groups on Friday.
“The peso’s strengthening, if it continues, is also expected to help the market rise further. Investors may watch out for the upcoming April S&P Global Manufacturing PMI (Purchasing Managers’ Index) for clues on the local economy,” Tantiangco said.
The S&P Global Philippines Manufacturing PMI, which measures the trend of the manufacturing sector, will be released on May 2.
Online stock trading platform 2tradeasia.com, meanwhile, said “strong corporate earnings” results for 2024 sustained the PSEi above 6,000 despite the global uncertainties and economic growth downgrades by international institutions last week.
2tradeasia advised investors to opt for “selective accumulation in quality names, especially those with visible earnings growth in the medium term.”
“We continue to harp on the relative strength of the Philippine economic model (domestic-driven, services-focused) that is now being highlighted relative to regional peers,” it said.
Despite the lower economic outlook for the country by the International Monetary Fund, it sees the Philippine economy among the strongest in Southeast Asia, expecting it to expand by 5.5 percent this year. It had revised its previous forecast of 6.1 percent growth for the Philippines.
On Friday, the World Bank also lowered its growth outlook for the Philippines to 5.4 percent from 6.1 percent.
2tradeasia said the PSEi continues to trade at a discount from historical and peer averages.
“A benign inflation trajectory, public spending resumption post-election, private capex continuity, and strong topline growth in the first quarter should all provide tailwinds for the 2025 story of local equities,” it said.
“From a more tactical standpoint, the rapidly shifting global trade regime and volatile macro risks demand greater selectivity and a premium resilience: high return on invested capital (ROIC), low-debt, and pricing power might have more weight than beta or momentum while clearer catalysts develop,” 2tradeasia added. –With a report from Reuters
