Bargain-hunting seen lifting PSEi, but all eyes are on MB meeting

Investors may take advantage of depressed stock prices following last week’s selloff and pick up select bargains, but a downward bias is nevertheless expected as the market awaits the Monetary Board (MB) policy decision of the Bangko Sentral ng Pilipinas (BSP).

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., cited the monetary policy meeting this week as among the leads setting the tone for this week’s trading.

Ricafort sees “recent signals on another +0.25 BSP rate hike on June 23 and another +0.25 BSP rate hike on Aug. 18.”

In May, the BSP raised the key rate—upon which lending rates of banks and financial institutions are based—by 25 bps to 2.25 percent after keeping it at a record low of 2 percent since November 2020 given rising inflation.

US Federal Reserve

The decision this week comes on the heels of the US Federal Reserve’s recent major decision to raise its own key rate by a hefty 75 basis points to combat runaway inflation that reached a 41-year high. This, in turn, prompted many investors to head for the exits thus bringing down the benchmark Philippine Stock Exchange index (PSEi). On Friday, the PSEi slipped by 0.96 percent, or 61.45 points, to settle at 6,331.56 while the wider all-shares index shed 1.17 percent, or 40.29 points, to end at 3,394.95.

Philstocks Financial Inc. senior research analyst Japhet Louis Tantiangco also took note of other trading risks, including the weakening peso and a threat of an economic recession in the United States amid the monetary policy tightening.

Last week, VistaReit made its market debut, closing at P1.75 each on the first day of its trading. It had a trading volume of 158.2 million with value turnover of P270.29 million that day.

Balai ni Fruitas, meanwhile, set the final price of its initial public offering at P0.70 apiece. Offer period is from June 17 to June 23 while the listing is set on June 30. INQ