Interest rates

Inflation and interest rates will continue to weigh on the PSEi – Manila Bulletin

The local stock market is expected to continue to be weighed down by concerns over rising inflation and its impact on monetary policy and consumption at home and abroad, while investors will keep an eye on remittances and balance of payments data.

“The local market appears to have a downside bias next week due to inflation and monetary policy concerns. By the start of the week, investors should be digesting the May US inflation that is s ‘is further accelerated,’ said Japhet Tantiangco, Philstocks Financial’s senior research supervisor.

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He added that “consequently, concerns about the possibility of a more aggressive policy stance from the Federal Reserve could also arise. So next week could start on a bearish note.”

“The US Fed’s expected 50 basis point hike (this) week just like US inflation in May is expected to pick up (over the) weekend,” 2TradeAsia.com said.

“Inflation concerns in the Philippines are also seen as dampening sentiment amid the upside risks that are already in play, including rising fuel and electricity prices, a weaker peso and the increase in the minimum wage,” Tantiangco said.

For this reason, he noted that “worries about how hawkish the political outlook for Bangko Sentral ng Pilipinas will be is also seen as weighing on the market.”

“May’s inflation rate rose further to 5.4%, reinforcing more aggressive monetary moves over the coming months. economic team coming to put the country in a better fiscal position,” said 2TradeAsia.com.

Tantiangco said investors should also watch our OFW Cash Remittance and Balance of Payments data this week.

“When markets are left to speculate on market risks and uncertainties, the result is volatile prices that reflect internal value plus/minus some emotion related to those uncertainties. Accumulate on dips,” advised 2TradeAsia.com.

Abacus Securities Corporation has a Buy recommendation for Vista Land and Lifescapes because “We believe VLL will outperform over the next 6-12 months, despite being the worst performing real estate stock this year, thanks to its margins. strong, resilient earnings and can be the first among equals to return to pre-pandemic profit levels.

The brokerage firm also likes D&L Industries which “is poised to grow faster as it benefits from a weaker peso and free cash flow is expected to outpace earnings growth going forward.”

“Investors should remember that DNL is one of the few listed companies to benefit from a weaker peso. Exports grew more than 60% last year and 45% in the first quarter, so dollar revenues now exceed dollar-denominated input costs. With the exchange rate (at P53.00 to the dollar), DNL is poised to grow faster,” Abacus said.

The brokerage also has a buy rate for PLDT due to a 20% upgrade to its 2022 earnings forecast from six months ago, which is the best among index stocks.

“Earnings for 2022 are also expected to be above pre-pandemic levels, and the stock is still trading below its net asset value, while the successful closing of part of the company’s tower sale could soon result in special cash dividends,” says Abaque.

Meanwhile, COL Financial upgraded Converge to a BUY despite a downward revision to its net profit forecast, “because the recent CNVRG stock sell-off was too steep.”

“Furthermore, the industry remains underpenetrated, which should allow the company to maintain its double-digit growth rate in the coming years,” he added.

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