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Manila Bulletin devider Business devider The Stock Market devider Stocks face bearish default as Middle East deadlock lingers

Stocks face bearish default as Middle East deadlock lingers

Published Apr 27, 2026 12:00 am  |  Updated Apr 25, 2026 03:48 pm
Local stock market is expected to remain in a bearish holding pattern this week as prolonged diplomatic deadlock in the Middle East dampens investor appetite, even as the market looks toward domestic trade data and the United States (US) Federal Reserve for direction.
While local equities have fallen to bargain levels, analysts suggested the lack of a compromise among conflicting nations in the Middle East will keep a lid on any potential recovery. Japhet Tantiangco, research manager at Philstocks Financial, said the market maintains a bearish default due to these lingering geopolitical uncertainties.
The sentiment is further aggravated by expectations of rising domestic inflation and the sustained weakness of the Philippine peso, which continues to pressure the central bank to maintain a hawkish stance.
Online brokerage 2TradeAsia.com noted that while current tensions and the potential blockage of the Strait of Hormuz align with previous expert projections, the consequences for global energy markets are becoming more structural.
The firm expects a significant shift in capital flows, particularly from the Europe, Middle East, and Africa regions. Capital that previously fueled global expansion in artificial intelligence, data centers, and luxury assets is now pivoting toward defensive reinvestment in upstream and downstream oil infrastructure.
This repatriation of capital is expected to limit global equity traction well into 2026, leaving markets like the Philippines increasingly reliant on domestic liquidity to sustain valuations.
Furthermore, the Bangko Sentral ng Pilipinas’ decision to maintain elevated interest rates is viewed as a headwind for local equities that will likely persist until 2027. Navigating this landscape requires a disciplined focus on high-quality stocks with robust cash flows capable of withstanding a high-interest-rate environment.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the next major catalysts will be developments related to Iran. Negotiations between Washington and Tehran have yet to resume following Iran’s refusal to participate in the latest round of talks.
Investors are also bracing for the Federal Reserve’s rate-setting meeting on April 29, 2026. While a pause is widely expected, the market will scrutinize the Fed’s signals for the long-term direction of US rates.
In terms of specific equities, COL Financial maintained a buy rating on MREIT Inc., citing an attractive estimated 2026 dividend yield of 7.6 percent. The brokerage noted that a second asset infusion scheduled for the latter half of the year is expected to be dividend accretive.
Meanwhile, Unicapital Securities upgraded its target price for Puregold Price Club Inc. to ₱63.90 per share, issuing a buy call following revised revenue growth assumptions for the company's S&R segment.
Unicapital research analyst Jeri R. Alfonso identified Puregold as a top pick in the consumer space, citing its resilient business model. During the 2022 inflation spike triggered by the Russia-Ukraine conflict, the company delivered double-digit bottom-line growth, signaling its ability to defend margins despite macro uncertainty.

Related Tags

Philstocks Financial Japhet Tantiangco Rizal Commercial Banking Corporation Michael L. Ricafort 2TradeAsia.com COL Financial Unicapital Securities Inc. Jeri Alfonso
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