Philippine financial markets are likely to remain cautious on Monday, with the PSEi expected to trade sideways as investors await the Bangko Sentral ng Pilipinas’ Aug. 27 policy decision and assess persistent inflation, currency, and growth risks.
2TradeAsia sees the PSEi finding support within the 6,100 to 6,300 range, although Ghost Month could keep liquidity and trading volumes subdued. Weather-related disruptions and a weak peso are also clouding the outlook for economic activity and corporate earnings.
The brokerage recommends shifting toward cash-generative, high-dividend stocks, particularly power utilities, telecommunications companies, and top-tier REITs, as their yields remain competitive with government bonds.
“We prefer rotating out of capital-intensive cyclicals and weather-exposed retail names into cash-generative, high-dividend stocks,” 2TradeAsia said.
Consumer staples, power distribution, and telecommunications infrastructure are seen as relatively defensive, while cement, construction, and discretionary retail could face pressure from flooding and delays in infrastructure activity. Selective opportunities may still emerge in speculative and mining stocks.
Meanwhile, the peso could draw support from a possible BSP rate hike this week, which may help contain currency volatility and inflationary pressures.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso has remained relatively stable around P61.60 to P61.80 per dollar, potentially reflecting efforts to smooth market volatility.
He identified immediate support at P61.45 to P61.65, followed by P61.10 to P61.30 and the psychological P61 level.
Resistance stands at P61.60, then P61.75 to P61.80, with the record P61.995 level and P62 emerging as key hurdles.
For investors, Monday’s session is likely to be less about chasing gains and more about positioning ahead of the BSP decision, with defensive income stocks offering a steadier harbor while rate and currency risks remain elevated.
