Investors in the local stock market will eagerly wait for the result of the Monetary Board’s policy meeting and the release of US inflation numbers this week, which will determine whether last week’s rebound will be sustained.

“Next week, the Bangko Sentral ng Pilipinas’ monetary policy decision is expected to be the focus of the local market. A policy rate cut is expected to sustain the local market’s upward momentum, while an unchanged policy rate might lead to a market decline,” said Philstocks Financial Research Manager Japhet Tantiangco. 

Online brokerage 2TradeAsia.com said “Investor psyche is expected to remain glued to the BSP's move next week-an off-cycle rate cut will rouse animal spirits in equities, but pragmatism dictates a more neutral move is more likely in light of current data.”

Tantiangco added that, “Investors are also expected to monitor the developments at Wall Street. A further easing of recession concerns is seen to help in lifting market sentiment while a worsening of the said concerns is expected to weigh on the market.

“Investors may also take cues from the upcoming foreign direct investment and OFW remittance data, as well as from second-quarter corporate results.”

2TradeAsia.com said, “US July inflation will be reported this week, a much-anticipated data point for global markets ahead of the FOMC's September policy meeting.”

“Yields are penciling in a 50-bps cut next month, but ultimately the decision rests on upcoming jobs and price data-made more critical after an earlier weak jobs report triggered a recession indicator, spooking markets,” it noted. 

For stock picks, COL Financial has a BUT rating for Manila Water Company based on its second-quarter 2024 earnings performance. 

“We continue to like MWC as it continues to benefit from the rate rebasing exercise, posting impressive growth in the past few quarters,” it noted.

The brokerage also has a BUY rating for Megaworld Corporation, “given its robust residential segment and recovering malls and hotels. Its office segment remains a steady source of income and a strong anchor of the company’s value despite industry challenges.”

It noted that, “Shares of MEG are attractively valued, it is trading 49 percent below our fair value estimate.”