Equity investors watch earnings, BSP signals

The benchmark Philippine Stock Exchange Index (PSEi) advanced during the past week despite inflation accelerating anew in July, with the shift in sentiments tracking markets overseas and the slide in key commodities such as oil.

For the coming week, investors would still follow the release of corporate earnings and potential signals from the Bangko Sentral ng Pilipinas (BSP) after the latest inflation print.

The latest PSEi reshuffle comes into effect on Monday, which will see the inclusion of Semirara Mining and Power Corp. and the removal of Security Bank Corp.

The PSEi closed at 6,405.50 after adding 1.42 percent week-on-week.

The Philippine Statistics Authority said on Friday inflation quickened to its fastest pace in four years, reaching 6.4 percent in July.

“Although we may see a slowdown in consumer prices in the coming month due to base effects, inflation will remain a challenge until the first half of 2023,” Bank of the Philippine Islands (BPI) said.

“We are still yet to see the peak in inflation near 7 percent in October should global price pressures from oil, energy and food remain substantial,” it added.

BPI said the central bank was expected to increase interest rates until the end of the year.

“There is reason to believe that the economy has enough capacity to absorb policy normalization. While a hike towards 4.25 percent by end-2022 will be a slight damper on demand, the contractionary risk of de-anchoring inflationary expectations carries more weight,” the lender said.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., added that risks to equities would persist without a resolution to the Russia-Ukraine conflict.

He said the PSEi’s next resistance levels were 6,500 to 6,600 while immediate support areas were from 6,200 to 6,100.

—Miguel R. Camus INQ