Bears not done yet with inflation-sensitive equities
The Philippine benchmark index would remain range-bound for the week while investors wait for the Bangko Sentral ng Pilipinas’ next interest rate setting meeting on Dec. 15.
Jonathan Ravelas, a veteran stock market analyst and financial strategy consultant at e-Methods for Business Management Corp., sees the Philippine Stock Exchange index (PSEi) moving within the 6,300 to 6,800 levels with potential downside risks as persistent inflation keeps interest rates elevated.
The PSEi rose 1.39 percent to close the previous week at 6,580.12.
Despite the recent gains, Ravelas said the broader environment was volatile for risky assets such as stocks.
He said high inflation was being fueled by rising demand, citing the country’s easing unemployment rate.
“This means there is more money in the hands of the public so inflation could still run hotter. There could still be more interest rate hikes but probably at a lesser degree,” Ravelas told the Inquirer.
“We are not yet out of the woods,” he said while explaining that optimism during the year-end holiday season tends to dissipate in the first two months of the new year as bills come due.
