The Philippine stock market is expected to continue moving sideways this week after benign inflation failed to spur a rally, although some investors will take cues from data to be released by the Bangko Sentral ng Pilipinas, including foreign direct investment and balance of payment numbers.

“(Last week), the PSEi moved sideways as buying momentum wanes despite stable inflation. Continue to expect the market to move sideways to down within the 6,000 to 6,500 levels in the near term,” said Reyes Tacandong & Co. Senior Adviser Jonathan Ravelas.

Philstocks Financial Research Manager Japhet Tantiangco noted that the PSEi failed to breach the 6,400 resistance line last week and trading has been lethargic, thus, “Overall, market confidence is seen to remain low which explains the tepid movements.”

While the local market is deemed undervalued with a price-to-earnings ration of 11.5 times compared to its five-year average of 17.3 times and the regional average of 15.9 times, he said “Sentiment remains bearish however due to the lingering global trade uncertainties caused by the US’ trade policies.”

“On a positive note, our latest inflation print may raise hopes of more aggressive policy easing by the Bangko Sentral ng Pilipinas which in turn may give the market a boost.

“Next week, investors are also expected to digest our labor market data as this would give clues on the strength of our local economy,” Tantiangco said.

Online brokerage firm 2TradeAsia.com said “the country continues to enjoy disinflation, unlike peers in the region… This development supports a more accommodative monetary policy stance by the BSP-recall that the BSP already did a second quarter cut (25bps), with consensus leaning towards an early third quarter cut.

“Our view is leaning towards a conservative June or August cut (versus June and August) given long-run pressure from fiscal restart and pending wage increases.”

For stock picks, Abacus Securities Corporation names three companies that are optimal for one to two years that also gives out dividends regularly: PLDT, RL Commercial REIT, and Citicore Renewable Energy Corporation.

“We like TEL because buzz about Maya's IPO will grow over the given time frame but especially after rival Mynt goes public. We also recommend RCR because management indicated plans that would increase its market capitalization by 200 percent via asset infusions and this is likely to qualify it for index inclusion as soon as next year.

“Lastly, CREC will likely have completed 1.0 to 1.5 gigawatts (gross) of solar capacity by end-2026 compared to a few hundred megawatts currently. And, like other solar power firms, it is benefitting significantly from a supportive regulatory environment and falling costs for photovoltaic panels and batteries,” the stock brokerage said.