Investors are hoping that the Bangko Sentral ng Pilipinas’ (BSP) policy meeting and the domestic inflation rate announcement this week will be the catalyst needed to spur trading activity in the local stock market.

“The local market managed to partially recover some lost ground in last week’s trading as investors hunted for bargains. However, trading activity was thin, implying that market confidence remains weak amid lingering uncertainties,” said Philstocks Financial Research Manager Japhet Tantiangco.

He noted that, “This week, investors are expected to watch out for the Philippines’ September inflation data and the BSP’s policy decision.”

Tantiangco explained that an inflation rate within the BSP’s 1.5 percent to 2.3 percent projection, especially one biased towards the lower end, may give sentiment a boost. A BSP rate cut or signals of further policy easing in the near term are also expected to help lift investor sentiment.

“Investors are also expected to take cues from the movement of other financial markets. A further improvement in the Peso’s position and a further decline in yields are expected to help the market,” Tantiangco said.

Meanwhile, in the US, 2TradeAsia.com said a rate cut has already been fully priced in for the Fed's next meeting, so the upcoming consumer price index (CPI) print will be pivotal. “If inflation does not print as expected, the Fed Chief's recent remarks may temper easing expectations (and further disappoint markets),” the brokerage said.

On the local front, 2TradeAsia.com noted that “valuations remain compelling—we reiterate that many blue-chip names trade at multi-year low price-to-earnings ratios, offering pockets of opportunity for discerning investors.”

“Global slowdown signals and domestic lethargy suggest a cautious approach, but undervaluation in the local equity market offers selective upside for nimble investors. While the PSEi’s range-bound struggle and global risks keep sentiment muted, these levels present a strategic entry for long-term capital,” it added.

For stock picks, Unicapital Securities Inc. has a bullish call on Jollibee Foods Corporation, as it sees a 49 percent potential upside from current levels.

“In our perspective, the growth story of the group remains intact. Earnings are set to climb by double digits this year, with momentum coming from the full integration of Compose Coffee, steady run of the domestic market, and the expanding footprint of its international units,” said Unicapital Research Analyst Jeri R. Alfonso.

Meanwhile, Abacus Securities Corporation favors The Keepers Holdings Inc. as improving consumer sentiment uplifts its outlook. The distribution of the firm’s products also benefits from the expansion of sister company Puregold and S&R.