Last week, the PSEi traded upwards by 2.43% week-on-week, closing at 7,428.30 (up 176.00 points). This was driven by the Bangko Sentral ng Pilipinas\u2019 (BSP) decision to cut reserve requirement ratios (RRR) for universal and commercial banks by 250bps from 9.5% to 7.0%. The market also reacted positively to dovish language by BSP Governor Remolona, Jr., who hinted that the BSP is considering reducing rates by 25bps at each of its next two meetings. This would bring policy rates down to 5.75% by year-end. Overseas, the US 2Q24 GDP data expanded by 3.0%, an acceleration from 1Q24’s 1.4%, according to the US Bureau of Economic Analysis\u2019 (BEA) \u201cthird\u201d estimate.<\/p>\n\n\n\n
The week, we anticipate the PSEi to maintain its upward momentum, supported by easing inflation, which is expected by consensus to be 2.5% in September. BSP\u2019s Business Expectations Survey (BES) signaled an optimistic business sentiment for the next quarter, with the overall confidence index (CI) improving to 56.8% (from 43.7%). This optimism is supported by forecasts of elevated demand for specific goods, reduced interest rates, softening inflation, and better economic environment. Meanwhile, BSP\u2019s Consumer Expectations Survey (CES) indicated that consumer confidence for 4Q 2024 has turned positive at 0.7% (from -0.4%), driven by expectations of greater and additional sources of income, more job availability, salary raises, and more family members entering the workforce. <\/p>\n\n\n\n
However, gains may be capped as geopolitical tensions in the Middle East have intensified following the assassination of Hassan Nasrallah, leader of the militant faction Hezbollah, during Israeli airstrikes on Beirut despite US calls for a ceasefire. This event has raised fears of war, as Hezbollah\u2019s ally, Iran, has committed to retaliate.<\/p>\n\n\n\n
Recommendation<\/strong><\/td>| Buy on breakout<\/td><\/tr> | 1-Year Target Price<\/strong><\/td> | PHP 4.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n | <\/div>\n\n\n\n Volume and interest in FILRT remain subdued, with the stock trading within the PHP2.85 to PHP3.28 range since September 2023. Momentum indicators, such as the We recommend buying FILRT shares once it breaks above its range on strong volume and upon the announcement of yield-accretive asset injection plans, as this would likely drive interest and push the stock higher. We recommend accumulating once FILRT breaks out of its range at PHP3.30 with strong volume. Take profits at PHP3.80 and set stop loss limits below PHP3.00.<\/p>\n\n\n\n <\/div>\n\n\n\n 2. Filinvest Land, Inc. (FLI)<\/h3>\n\n\n\n
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