The upcoming reduction in the Philippine stock transaction tax, effective Tuesday, is expected to boost trading activities, as investors remain cautiously optimistic despite global markets and oil prices being sensitive to developments in the Middle East.

“The local market managed to bounce back last week as Middle East tensions eased. However, trading was still thin, reflecting tepid market confidence with many still on the sidelines amid lingering uncertainties,” said Philstocks Financial Research Manager Japhet Tantiangco.

He noted that, fundamentals-wise, the local market is still deemed undervalued and market mood could be cautiously optimistic.

“While Middle East tensions have subsided, the relation between Israel and Iran remains uncertain. This is expected to keep investors on a cautious stance. On a positive note, the easing of global oil prices and the rebound of the local currency may continue to provide support to the local bourse,” Tantiangco said.

Online brokerage 2TradeAsia.com said “Global markets are navigating persistent geopolitical currents, even as the immediate Middle East conflict has slightly de-escalated; this fragile stability, however, does not erase the underlying vulnerability of global supply chains.”

It added that, “Investors must grapple with a monetary policy environment increasingly constrained by geopolitical realities and the unpredictable, yet impactful, weaponization of trade. Watch oil and foreign exchange as direct barometers of implied volatility, at least in the very near-term.”

Tantiangco said investors are also expected to deal with the uncertainties over US President Donald Trump’s July tariff deadline and hopes that the deadline would be extended may give sentiment a boost.

He added that, “Investors are also expected to watch out for the June S&P Global Philippines Manufacturing PMI for clues on the local economy.”

“While the impending stock transaction tax cut (effective July 1) and a revitalized initial public offering pipeline (including Maynilad's later in the year), inject a much-needed boost to market liquidity and investor activity, these remain catalysts for selective engagement, not indiscriminate buying. Endurance is key,” 2TradeAsia.com noted.

For stock picks, Unicapital Securities Inc. has a BUY rating for Apex Mining Co. as it is expected to generate higher earnings due to the recent rise in gold prices.

“We raised our target price by 15 percent as we reflected an average of 35 percent upward adjustment to our 2025 to 2034 earnings per share forecast. This is supported by sustained high gold prices driven by increased demand for safe-haven fueled by global trade tensions and the outbreak of war in the Middle East,” said USI Research Analyst Peter Louise D. Garnace.

He added that, “We also believe that APX will continue to benefit from management’s efforts to optimize Maco mine’s operations, targeting to mill over 3,000 tons of ore per day.

“We reiterate our view that APX remains undervalued as it is currently trading at six times 2025 estimated price to earnings ratio, a steep discount to its peer’s average of 28 times, unwarranted in the context of industry leading 2025 return on equity of 23 percent (vs. peer’s 2025 ROE of 12 percent),” Garnace said.