PHL shares may rise further on bargain hunting

PHILIPPINE STOCKS may extend their climb in the coming days on bargain hunting, with investors likely to stay on the sidelines amid a shortened trading week.

On Friday, the Philippine Stock Exchange index (PSEi) inched up by 0.07% or 4.62 points to close at 6,082.44, while the broader all shares index slipped by 0.03% or 1.18 points to 3,621.76.

Week on week, however, the PSEi was down by 0.03% or 1.75 points from the 6,084.19 finish on April 4, marking its fifth straight week of decline.

Philippine financial markets are closed on April 17 and 18 for non-working days in observance of Holy Week.

“Ahead of the Lenten pause, the local mark was not spared from a global rout driven by retaliatory tariffs, but was staved off by a predicated rate cut from the Bangko Sentral ng Pilipinas (BSP),” online brokerage 2TradeAsia.com said in a market note.

“The local market is already on a five-week losing streak as global trade war fears take over sentiment. On a positive note, the market is still able to keep its position above the 6,000 level,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

On Wednesday, US President Donald J. Trump declared a 90-day pause on the “reciprocal” tariffs it imposed on most of the US’ trading partners including the Philippines, subjecting them to a 10% blanket duty instead of the adjusted rates announced earlier.

Meanwhile, the BSP on Thursday cut benchmark interest rates by 25 basis points (bps) to bring the policy rate to 5.5%, as expected by all 17 analysts in a BusinessWorld poll, putting its easing cycle back on track after an unexpected pause in February.

BSP Governor Eli M. Remolona, Jr. said the Monetary Board is considering further rate cuts this year in “baby steps” of 25 bps at a time.

The Monetary Board has now reduced borrowing costs by a cumulative 100 bps since it kicked off its easing cycle in August last year.

Mr. Tantiangco said bargain hunting following the market’s recent decline may continue to lift the PSEi this week. “Hopes of further easing by the BSP moving forward may also compel investors to take positions.”

“However, worries over the global economy amid the US’ protectionist policies and the possibility of retaliation by other countries may continue to weigh on sentiment. Investors are also expected to maintain a cautious stance especially by the end of the shortened trading week as they take into consideration the uncertainties on the days the market is closed,” he added. He placed the PSEi’s support at 6,000 and resistance at 6,400.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort put the PSEi’s support at 6,000 and minor resistance at 6,230-6,490.

“The PSEi posted relatively modest declines despite the recent volatility in the global stock markets,” Mr. Ricafort said.

For its part, 2TradeAsia.com pegged the PSEi’s immediate support at 6,000 and resistance at 6,400. — Revin Mikhael D. Ochave