Cheap stocks not enough bait for PH investors

A strong rally may still be far from the reach of the local market this week as investors remain anxious over monetary policy uncertainties.

The benchmark Philippine Stock Exchange Index (PSEi) was painted red on all four trading days last week due mainly to the US Federal Reserve’s move to keep interest rates unchanged while indicating there would only be one cut this year.

This caused the PSEi to close Friday on a four-session losing streak at 6,383.70, down by 2.07 percent from 6,518.76 the previous week.

Japhet Tantiangco, research manager at Philstocks Financial Inc., explained that while the consecutive days of declines may present opportunities for bargain hunting, traders have yet to see any strong drivers to pull the market up.

“The optimism needed for the market to rally is not yet seen,” he said. “Investors are still waiting for positive catalysts, primarily one which would hint of monetary policy easing soon in the Philippines.”

Until then, Tantiangco noted that the market may only move sideways. The dovish outlook of the American central bank, coupled with the weakening peso, may dampen optimism, he added.

Should the PSEi fail to reclaim 6,400, Tantiangco said the market’s new target range would be between 6,150 and 6,400.

Meanwhile, AP Securities Inc. research head Alfred Benjamin Garcia is seeing immediate support at 6,350 and resistance at around 6,570.

“It’s very light on economic data next week, so we’re looking at a potential bounce mainly driven by technicals and bargain hunting on select names,” he said.

The Bangko Sentral ng Pilipinas has hinted at possibly having “more than one” rate cut this year. It will consider the faster May inflation print during its next policy meeting on June 27. INQ