PSEi braces for volatility as US trade deadline looms
Published Jul 7, 2025 12:00 am
|
Updated Jul 5, 2025 06:14 pm
Cautious trading is expected to prevail at the Philippine stock market this week as investors await developments following the July 9 deadline for United States trade negotiations.
“We may see cautious sentiment as global trade uncertainties may take center stage again. This is as the US’ trade negotiations deadline draws near,” said Philstocks Financial Research Manager Japhet Tantiangco.
He added that, “An established trade deal between the US and the Philippines, or an extension of the negotiations deadline, may give the market a boost.”
“With ‘Tariff Tuesday’ deadlines looming, more opaque earnings visibility and further reconfigurations of global firms to de-risk from supply chain volatility is expected in the short run,” said online brokerage 2TradeAsia.com.
Meanwhile, Tantiangco said, “Prospects of further easing by the BSP this year following the tepid June inflation print may also provide support to the bourse this week. Investors are also expected to watch out for our upcoming labor market data for clues on the local economy.”
Other than the jobs data, additional economic news anticipated this week include the gross international reserves and foreign direct investment numbers from the central bank.
According to 2TradeAsia.com, the first-semester inflation average of 1.8 percent is still below the BSP's two percent to four percent target and “this reinforces our conviction that the BSP will continue its accommodative and divergent stance, with about one to two more 25-basis point rate cuts probable for the second half of 2025.”
“While a broad re-rating is still constrained by global uncertainty, we underscore that local fundamentals have since been more constructive relative to global peers.
“Particularly, the ongoing BSP easing, while mitigating local borrowing costs, also highlights potential carry opportunities for foreign capital into PH securities, which could spill over into high-quality equities,” the brokerage said.
For stock picks, COL Financial Chief Equity Strategist April Tan’s most recommended stocks are Citicore Energy REIT Corporation, RL Commercial REIT Inc. (RCR), Security Bank Corporation, Puregold Price Club and SM Investments Corporation.
She said the two real estate investment trusts are favored because of their high yields, upcoming asset infusions by their sponsors, and because declining interest rates make them even more attractive as investors get better returns compared to bank deposits or fixed income securities.
Meanwhile, Abacus Securities Corporation Research Head Nicky Franco said he is overweight on REITs and also favors RCR because of its possible inclusion as a new member of the PSE index.