Sentiment at the local stock market may be weighed down this week by another round of substantial hikes in fuel prices and investors will also be watching out for the government’s report on the inflation rate last month.

“Next week, the local market is seen to have a downward bias given the rise in global oil prices and the further depreciation of the Philippine Peso, both of which pose inflationary risks to our economy,” said Philstocks Financial Senior Supervisor for Research Japhet Tantiangco.

He added that, “investors may also focus on our May consumer price index data. An inflation print significantly faster than April’s 4.9 percent is seen to boost inflation expectations which in turn may weigh on the local bourse.”

“May's inflation report should be a key focus for participants. Particular interest will be on supply-side drivers to differentiate from the election-related impact that will unnaturally bloat the figure,” said 2TradeAsia.com.

It noted that, “This will be crucial for the BSP's potential move on its MB Meeting on the 23rd, though the BSP chief already expressed a possibility for another 25bps rate hike this month.”

The brokerage added that, “any whiff of entrenched inflation will make monetary policy unpredictable (and thus unsettle both equity and bond markets).”

“One important metric that we have put under our radar is purchasing power and consumer confidence; the real-world impart of elevated inflation for over six months plus higher PhilHealth premiums/new excise taxes and higher mortgage/financing costs will dictate sector picks over the medium-term,” 2TradeAsia.com said.

Aside from the consumer price index, Tantiangco said “investors may also watch out for our foreign trade, foreign investments, and labor market data to be released next week for clues on the local economy’s situation.”

Offshore concerns including the monetary tightening in the US and the Russia - Ukraine war may continue to weigh on sentiment.

For stock picks, Abacus Securities has its eye on The Keeper Holdings because its 2021 sales were already higher compared to 2019 and net income grew by a third in the first quarter.

“Meanwhile, KEEPR is still preparing to deploy the proceeds from its recent FOO. A deal is expected to close by yearend that will strengthen the supply and improve the cost structure for brandy moving forward,” it added noting that “the company is and will continue to benefit from premiumization in the liquor industry.”

For its part, COL Financial has a Buy rating for Keepers’ paret Cosco Capital which it said “remains severely undervalued with the market not valuing its other businesses (apart from PGOLD) like the liquor distribution and real estate business.”

It also has a Buy rating for Puregold “as it remains well-positioned to capture growth opportunities in the retail sector for its differentiated focus of middle to low-income class consumers as well as the niche market of resellers.”

COL also has a Buy rating for Vista Land because “the better-than-expected earnings of VLL gives us a reason to be optimistic on VLL. Despite the real estate revenues lagging peers, VLL is making this up through cost saving initiatives.”

It noted that, “The steady growth of reservation sales is also cause for positivity as this should support future revenues. Lastly, through its community malls, VLL is benefitting from a recovery in consumer consumption as quarantine restrictions are no longer in place.