Philippine stocks are expected to keep moving sideways this week, as investors await the release of April inflation data.
Analysts said investors would monitor the release of May 2024 inflation which would set the stage for the Bangko Sentral ng Pilipinas’ (BSP) move on its next policy meeting also this month.
Online brokerage firm 2TradeAsia.com said inflation would likely range between 3.7 percent and 4.5 percent on higher energy rates and agricultural prices and the impact of the weaker peso against the US dollar.
“Note that most inflation items remain cost-push, which implies that speculation of rate hikes should be minimal, unlike other economies abroad,” 2TradeAsia.com said.
The bellwether Philippine Stock Exchange index fell below the 6,400 level last week before closing at 6,433, still down by 2.82 percent or 186 points.
The market’s decline was largely due to the increase in treasury and bond yields as well as continued concerns over inflation and interest rates.
Average turnover increased to P8.7 billion, while average net foreign selling widened to P1.61 billion.
“All signs are pointing to restrictive monetary policy staying for a good chunk of second half of 2024; funds are expected to remain generally risk-ft until the new data suggests otherwise, and the tension between price stability mandate of central banks versus damaging impact of running record level rates is likely to spillover to 2025,” 2TradeAsia.com said.
