Last week, the PSEi surged +3.27% week-on-week, closing at 7,252.32 (up 229.47 points), as investors positioned themselves ahead of the US Federal Reserve\u2019s rate decision on 19 Sep 2024. The market displayed optimism over the anticipated shift towards monetary easing, with robust turnover bolstered by 15 consecutive days of net foreign buying, reflecting sustained foreign interest. <\/p>\n\n\n\n
The US Fed delivered a larger-than-expected 50-basis points (bps) rate cut, marking a notable shift towards an easing cycle. This outsized cut exceeded the anticipated 25-bps reduction, signalling a more assertive approach to loosening monetary policy. <\/p>\n\n\n\n
On the domestic front, Jul 2024 OFW cash remittances rose by 3.2% year-on-year to USD3.43 billion (from USD3.32 billion in July 2023), providing support for the Philippine Peso (PHP) against the US Dollar (USD). Moreover, on the latter part of the week (20 Sep 2024), the Bangko Sentral ng Pilipinas (BSP) announced a reduction in reserve ratios for universal and commercial banks, lowering them from 9.5% to 7% (effective 25 Oct 2024). The Fed\u2019s larger-than-expected rate cut has heightened expectations for further easing measures from the BSP, as local investors welcomed the prospect of more accommodative monetary policies in the coming months.<\/p>\n\n\n\n
This week, we expect the PSEi to take a breather following two consecutive weeks of gains and in the absence of fresh catalysts to further boost the local bourse. However, some positive sentiment may carry over as investors anticipate key data releases, such as the 2Q 2024 US GDP (Final), which is expected to show an increase to 3.0% year-on-year. Additionally, we foresee the BSP’s rate cut announcement to support share prices of the Financials Sector. <\/p>\n\n\n\n
On the geopolitical front, investors may adopt a guarded approach amid escalating tensions in the Middle East, especially concerning the long-running Israel-Hezbollah conflict, which has put pressure on oil prices. This has led to projected increases in petrol prices of PHP0.40 to PHP0.90 per litre, while diesel prices may rise by up to PHP0.40 per litre and kerosene prices could increase by up to PHP0.20 per litre. In this regard, gold spot prices are also expected to continue their rally, with the safe-haven asset breaking above the USD2,600 level for the first time, driven by the US interest rate cuts and rising tensions in the Middle East.<\/p>\n\n\n\n
Recommendation<\/strong><\/td>| Buy<\/td><\/tr> | 1-Year Target Price<\/strong><\/td> | PHP 2.19<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n | <\/div>\n\n\n\n ALLHC shows the formation of a bullish double bottom pattern, confirmed by a As the stock breaks out of its downward channel, we expect the continuation of bullish momentum and recommend accumulating the stock at current levels. Accumulating ALLHC at current levels isadvisable. Take profits 15% above your average cost and set stop loss limits 8% below your average cost.<\/p>\n\n\n\n <\/div>\n\n\n\n 2. Citicore Renewable Energy Corp. (CREC)<\/h3>\n\n\n\n
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