Investors in the local stock market will be looking forward to the release of the March inflation numbers this week to see if there will be further delays in the central bank's policy rate cuts.

“For the first week of April, investors are expected to look towards upcoming economic data for clues. Primarily, investors are expected to watch out for the Philippines’ March inflation data,” said Philstocks Financial Research Manager Japhet Tantiangco. 

He explained that “an inflation print significantly faster than February’s 3.4 percent may further temper hopes of monetary easing by the BSP which, in turn, would negatively affect the local bourse.” 

“The BSP chief is seeing an uptick of 3.9 percent versus February’s 3.4 percent,” said online brokerage firm 2Tradeasia.com 

It noted that “while the direction has likely been priced in (i.e. higher inflation in the second quarter due to seasonality, supply chain issues), the slope of change will be an interesting data point given sharp movements in food and transport baskets plus higher ambient temperatures moving energy demand upward.”

“We remain neutral on any earlier than mid-year rate cycle changes for these reasons (could even extend up to the third quarter), further supported by Fed comments of even stickier US inflation,” 2Tradeasia.com said. 

Meanwhile, Tantiangco said, “investors may also take cues on the local economy’s health from the upcoming March S&P Global Philippines Manufacturing PMI.”

He added that “investors are also expected to look towards other markets. The record performances from Wall Street, if it continues, is expected to give positive spillovers to the local market. Eyes may also be on the Philippine Peso which has been exhibiting weakness against the US Dollar recently. A continuation of this weakening may weigh on sentiment.”

2Tradeasia.com said, “the local bourse has been range bound in the 6,800 to 7,000 zone. It is likely to stay here in the near-term, pending strong impetus on the macro side.”

"After failing to close above 7,000 in early March, the market is now in consolidation mode, a pattern that may persist in the second quarter until inflation concerns abate and there is more confidence on the timing of interest rate cuts," said Chinabank Capital Corporation Managing Director Juan Paolo Colet.

For stock picks, both COL Financial and Abacus Securities Corporation have BUY ratings for Cebu Pacific after it reported a strong turnaround on the back of a recovery fueled by revenge travel.

“We believe that CEB is positioned to benefit from the recovery of demand for international travel and continued growth of the economy,” said COL. 

It warned though that there are key risks which include fuel price volatility amid OPEC+ production cuts, sharp depreciation of the peso, and larger- than expected number of aircraft grounded amid the Pratt and Whitney issue. 

For its part, Abacus said there is still room for growth in the travel sector as passenger confidence fully recovers after the pandemic. 

“And CEB’s outlook for 2024 appeared rosier given the improvements in the engine issues that led the company to forecast a higher growth range for seat growth in 2024. Early indication in the first quarter of 2024 have shown steady load factors despite seat capacity growing 14 percent year-on-year that should support its recovery to pre-pandemic levels,” it added.