The local stock market is poised for a potential rally as bargain-hunting is expected, fueled by recent gains in United States markets on signals of an upcoming rate cut from the US Federal Reserve, which aligns with investor anticipation of a policy rate reduction from the Bangko Sentral ng Pilipinas (BSP)

“Next [this] week, the local market could rise on the back of bargain hunting. Buying activity is expected to be boosted by hopes of a Federal Reserve policy rate cut next month following cues from its Chairman Jerome Powell at the Jackson Hole Symposium,” said Philstocks Financial Research Manager Japhet Tantiangco.

He added that, “Hopes of a rate cut by the Bangko Sentral ng Pilipinas in their Monetary Board meeting next week may also lift sentiment. Investors are also expected to look for clues on the BSP’s policy outlook at the said meeting.”

However, Tantiangco said that, “Chartwise, the local market remains bearishly biased as it continues to form lower-highs.”

According to 2TradeAsia.com, “The PSEi remains buoyed by steady second quarter earnings from banks and consumer names, yet it wrestles with tepid momentum amid foreign outflows.”

“The government's recent crackdown on corruption stance, paired with reshuffling in key bureaus, may signal positive fiscal reform that may eventually resonate through local securities and improve market efficiency.

“This is on top of Congress and public spending reopening after the elections; with the BSP poised to deliver 25-50 basis points in rate cuts through 2025, equities stand to gain from looser fiscal and monetary policy,” it added.

For stock picks, Unicapital Securities has a BUY rating for Puregold Price Club because “we believe the company could hit its revenue target of six to eight percent with their ongoing marketing efforts and improving consumer spending amidst cooler inflation.

Unicapital Research Analyst Jeri Alfonso said that, “In terms of valuations, PGOLD is trading at an attractive 8.9 times price to earnings ratio, reflecting a 32 percent discount to its historical average of 13.0 times and also below the industry average of 13.1 times.”

The brokerage has also upgraded Manila Electric Company to a BUY, “reflecting improved risk-reward as we expected Meralco to provide decent 2025 dividend yield of 4.6 percent, with a potential return of 15.2 percent.”

Meanwhile, Abacus Securities Corporation favors Jollibee Foods Corporation because of the company’s focus on growing its key segments in the Jollibee brand as well as its coffee and tea businesses “has been a step in the right direction and is looking much ahead of its 2025 guidance.”