The Philippine stock market will be trading sideways between 6,300 and 6,500 points this week while awaiting the official results of Monday’s elections.
Investors and traders will also watch out for further progress in the US-China tariff deal.
The PSEI ended last week’s trade at 6,458.2, points, up 0.72 percent from the prior week’s 6,411.86 close.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said this is the fourth week of a continued uptick in the bellwether index.
The PSEi is currently down 1.08 percent year-on-year, since closing 2024 at 6,528.79.
However, the PSEi is still down 28.71 percent from its pre-pandemic record close of 9,058.62, hit on Jan 20, 2018.
More than 68 million registered voters are expected to have trooped to their poll precincts Monday for the midterm election.
Jonathan Ravelas, managing director at eManagement for Business and Marketing Services (EMBM), said a “smooth” election will benefit the market when it reopens, which is today, Tuesday.
Astro del Castillo, managing director at First Grade Finance Inc., said the market would take some time to digest the election results.
He said investors are also focusing on another political risk after the election—the pending impeachment trial of Vice President Sara Duterten before the Senate.
“The market (for now) can take a breather from it (the election). You’ve eventually hurdled an obstacle, even if another political issue is hounding us. But somehow the election leaders and government will have to focus on the economy, especially given the uncertainty overseas, which is the global trade and other geopolitical and geoeconomics issues,” del Castillo said.
Analysts are confident the political exercise has already benefited the economy, given its boost to consumption.
Juan Paolo Colet, managing director at ChinaBank Capital Corp., said this was already seen in the improvement in household consumption in the first quarter, and is “largely reflected in corporate earnings” as well.
“There is momentum for a further lift in consumption and earnings in the second quarter, though global trade headwinds and US policy uncertainties are expected to temper the economic stimulus effects of the midterm elections,” he said.
Cristina Ulang, head of research at First Metro Investment Corp. (FMIC), said election spending historically adds an extra 1 percentage point to gross domestic product growth.
On Monday, US and Chinese officials announced they had reached a deal over trade tariffs during their weekend meeting in Switzerland.
According to US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, both sides agreed to lower their tariff levels and impose a 90-day tariff pause.
China’s commerce ministry said the two sides committed to take action by May 14.
Wendy Estacio Cruz, head of research at Unicapital Securities Corp., said the optimism due to improving sentiment over the US trade war, coupled with the Bangko Sentral ng Pilipinas’ willingness for a more accommodative stance, will help the PSE to trade rangebound.
Cruz noted the BSP has signaled further rate cuts this year due to a benign 2 percent year-to-date inflation rate.
“We expect the index to trade within the 6,300 to 6,500 range next week,” she said.
(With additional report from Reuters)
