Investors are expected to trade carefully this week, watching for clues on which direction to take from the confluence of geopolitical and economic factors ahead.
The benchmark PSEi closed last week at 6,408.27, up 1.08 percent from a week earlier, with late-week sentiment lifted by a ceasefire between Israel and Iran after a 12-day conflict.
The broader All Shares rose 2.01 percent, ending at 1,922.77.
Despite the week’s gains, the market remains down 1.85 percent in the year-to-date, after closing 2024 at 6,528.79.
Foreign investors continued to exit, with net outflows totaling P1.12 billion last week, bringing year-to-date net foreign selling to P41.18 billion.
“Market mood could be cautiously optimistic,” Japhet Tantiangco, research manager at Philstocks Financial Inc., said.
“While Middle East tensions have subsided, uncertainty remains. This is expected to keep investors guarded.”
However, easing global oil prices amid the Israel-Iran ceasefire and a rebounding peso may provide some near-term support to the local bourse, Tantiangco said.
Investors are also facing the last trading day of the first half of 2025 on Monday, a potential trigger for window dressing.
Meanwhile, the clock is ticking on US President Donald Trump’s tariff deadline, set to expire July 9, adding another layer of uncertainty.
“There’s hope that the tariff grace period will be extended,” Tantiangco said. “That could give markets a lift.”
Local investors will be eyeing the June S&P Global Philippines Manufacturing PMI, due Tuesday, for fresh clues on the health of the economy.
2TradeAsia.com said the Bangko Sentral ng Pilipinas’ accommodative stance remains crucial as global trade pressures persist and growth targets have been revised down to 5.5–6.5 percent, from an earlier 6–8 percent.
“The challenge this quarter is locating where monetary liquidity turns into real market value,” the trading platform note said. “Philippine equities still hold relative appeal, but investors will likely reward companies with strong balance sheets and high free cash flow conversion.”
Still, 2TradeAsia cautioned that a broad downward rerating may emerge by the end of the third quarter, depending on volatility in oil prices, foreign exchange and capital costs.
While exogenous shocks continue to shape global risk appetite, 2TradeAsia said local catalysts may drive selective engagement rather than a full-blown rally.
Among these are: the cut in stock transaction tax effective July 1, and a revitalized IPO pipeline, including the planned Maynilad listing later this year. “These developments will boost liquidity and activity,” it said, “but will likely lead to targeted buying over broad participation.”
