Philippine shares are expected to experience a cautious week as mixed economic data and ongoing geopolitical tensions weigh on investor sentiment. The Philippine Stock Exchange index (PSEi) closed at 6,290.35, marking a modest gain of 0.2% or 12.40 points on Friday.
Investors React to Economic Signals
The local market managed to post gains in last week’s trading, snapping a two-week losing streak.
Japhet Louis O. Tantiangco, Research Manager, Philstocks Financial, Inc.
Despite this uptick, analysts warn of a subdued market outlook due to external concerns, particularly the escalating tensions between the US and Iran. Additionally, domestic economic indicators are sending mixed signals.
The inflation rate for July was recorded at 6.2%, prompting concerns about further tightening from the Bangko Sentral ng Pilipinas (BSP). The central bank's next policy meeting is scheduled for August 27.
Philippine GDP growth slowed to 2.3% in the second quarter, down from 5.4% in the same period last year. This brings the first half's growth to 2.6%, falling short of the government's target of 3.5%-4.5%.
Tantiangco noted that the PSEi may trade between 6,150 and 6,400 this week as technical indicators suggest a loss of momentum.
Market analysts remain cautious but suggest that some investors may begin positioning themselves ahead of the BSP's upcoming policy meeting, despite slower growth possibly indicating a shorter tightening cycle.
With the start of the Chinese 'ghost month' on August 13, trading volumes may decrease, adding another layer of uncertainty to the market.