The local stock market will be waiting for November’s inflation figure this week, hoping that a lower number will spur a rise in share prices.
“This week, investors are expected to take cues from our upcoming economic data, primarily from our November inflation print which would give clues on the BSP’s next policy decision,” said Philstocks Financial Research Manager Japhet Tantiangco.
He noted that, “an inflation print lower than October’s 4.9percent, especially one that is near the lower-end of the Bangko Sentral ng Pillipinas’ 4.0 percent to 4.8 percent forecast is expected to spur optimism in the market.”
Tantiangco said the local bourse may start the week on a positive note on the back of the robust S&P Global Philippines Manufacturing PMI for November, and the positive cues from the US Markets including the further decline of the long term US treasury yields and the rise in Wall Street.
“A growing number of investors are piecing together a picture of a potentially good December for stocks. That narrative will be tested this week as the market turns its focus to the Philippine November inflation print and US October jobs data,” said China Bank Capital Corporation Managing Director Juan Paolo Colet.
He explained that, “a sustained slowdown in local inflation could persuade the BSP to keep its policy rate steady when the Monetary Board meets next week.”
“Meantime, signs of a cooling US jobs market would strengthen the view that the Federal Reserve is done with its rate hike campaign. Both outcomes should be positive for equities,” Colet added.
2TradeAsia.com said the “US labor and purchasing data will anchor market expectations for the Fed's next policy move (last FOMC this year is on Dec. 12-13).”
“The upcoming week will be another 4-day trading week, but the release of November inflation early on should help spark some excitement before discussion once again moves to monetary policy talks mid-December,” it noted.
The brokerage added that, “another rate pause is very likely at this point, given the Fed's direction and stabilized peso movement.”
“At current levels, the benchmark index is finding more fuel to hopefully end in the green (so far, down by 5 percent year-to-date); some positive news on the macro side could provide some short-term inspiration,” 2Tradeasia.com said.
For stock picks, COL Financial favors banks, particularly those that performed well in the third quarter of 2023 such as BDO Unibank, Metrobank, and Philippine National Bank.
It noted that BDO, Metrobank and PNB outperformed in the third quarter with BDO and Metrobank’s growth driven by higher-than-expected net interest income while Metrobank and PNB benefited from higher non-interest income.
Meanwhile, Abacus Securities Corporation is recommending that investors accumulate shares of SM Investments Corporation after noting that the two reclamation projects of the SM Group have been allowed to resume but SMIC’s share price is still more than seven percent lower than in the end of July when these projects were suspended.