Trading this week may go sideways, with an upward push on many shares still generally “undervalued” likely offset by some downward pressure on uncertainty over the trade war initiated by US President Donald Trump.
Japhet Tantiangco, an analyst at Philstocks Financial Inc., said the market has been trending up since after it hit “bottom” on January 31.
“At its current position, the market remains undervalued, leaving room for opportunities for long-term investors. However, downside risks remain, mainly because of the global economic risk brought about by the US protectionist trade policies.”
On a positive note, Tantiangco said the peso has been strengthening recently. “This is expected to help sustain the market’s rise,” he said.
The Philippine Stock Exchange index (PSEi) closed Friday’s trade up 52.04 points at 6,294.11.
Week-on-week, the benchmark PSEi closed 4.18 points or 0.1 percent lower than the prior week’s 6,298.29.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said on a year-to-date basis, the PSEi is still down 3.6 percent from its 6,528.79 close at end-2024.
Jonathan Ravelas, managing director at eManagement for Business and Marketing Services (EMBM), said the “escalating trade tensions arising from President Trump’s tariff war could cap the rally at the 6,300 level.”
“Continue to expect sideways to between 5,800 and 6,300 levels in the near term,”he said.
Online stock trading platform, 2tradeasia.com, said that the current “dissonance between
macro noise and fundamentals at the corporate level (contextualized by current prices)” should encourage bottom-up picking, at least, while waiting for stronger catalysts to develop,” it said.
“Reasons to tilt towards cautious optimism are becoming more opaque, but keep in mind that broader markets remain entrenched in macro uncertainty,” it said.
March inflation data could eventually pave the way for an April rate cut (both early April events) and provide the escape velocity the PSEi requires to approach 6,500. Focus on value and maintain strategic discipline amid the noise,” it added.
