Share prices on the Philippine Stock Exchange are expected to trade sideways this week amid caution and signs of weakening buying momentum.
Despite a stable inflation outlook, investors will closely monitor developments in global trade, particularly following a high-level phone call last week between US President Donald Trump and Chinese President Xi Jinping.
“The PSEi moved sideways last week, closing at 6,376.79 as buying momentum continued to fade despite stable inflation,” Jonathan Ravelas, managing director at eMarketing and Business Management Services, said.
“We continue to expect the market to move sideways to downward in the near term, likely within the 6,000 to 6,500 range,” Ravelas added.
The benchmark PSEi posted a slight 0.56 percent week-on-week gain from the previous week’s close of 6,341.53, Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said.
However, the benchmark remains down 2.33 percent in the year-to-date, having ended 2024 at 6,528.79.
Foreign investors were net buyers last week, with inflows totaling P543.31 million. Total buying reached ₱13.14 billion, while selling amounted to ₱12.6 billion.
On the international front, China over the weekend granted temporary export licenses to rare-earth suppliers of the top three US automakers, Reuters reported.
The licenses, some valid for six months, were issued shortly after the Trump-Xi call, which reportedly focused on trade and resulted in what Trump described as a “very positive conclusion.”
Follow-up discussions between the two nations are expected, with a US delegation–led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer–scheduled to meet with Chinese counterparts soon.
Meanwhile, local analysts said the Philippines remains in a relatively favorable macroeconomic position.
Online trading platform 2TradeAsia noted the global economy is caught between a weakening industrial cycle and an anticipated monetary policy pivot, while the Philippines continues to benefit from a disinflationary trend.
The Philippine Statistics Authority reported May inflation at just 1.3 percent–the lowest level in six years.
“Our view is leaning toward a conservative rate cut in either June or August, given long-term fiscal pressures and upcoming wage hikes,” 2TradeAsia said.
Sector rotations may continue, favoring companies with strong pricing power and margin recovery potential, especially ahead of the earnings season in July or August, the firm added.
Japhet Tantiangco, analyst at Philstocks Financial Inc., observed that the PSEi failed to break past the 6,400 resistance level.
“Market confidence remains low, explaining the tepid movement,” he said.
“Fundamentally, the market remains undervalued, closing the week with a PE ratio of 11.5x–well below its five-year average of 17.3x and the regional average of 15.9x.
However, sentiment is still weighed down by persistent global trade tensions and US policy uncertainty,” Tantiangco added. (With a report from Reuters)
