The PSEi ended last week in the green, closing +0.53% higher week-on-week at 7,467.92 (+39.62 points). Investors entered the fourth quarter cautiously amid rising crude prices and escalating geopolitical tensions in the Middle East, trading with little conviction mid-week as they awaited inflation data for Sep 2024. As it happened, last month\u2019s inflation came in at 1.9% year-on-year \u2013 its lowest level in four years \u2013 pulled down by food and transportation prices. This gave the local bourse a last-minute boost to erase losses from profit-taking throughout the week.<\/p>\n\n\n\n
This week, we expect the local bourse to trade with renewed vigour on the back of better-than-expected Philippine inflation and US jobs data. Locally, cooling inflation provides support for further monetary policy easing by the Bangko Sentral ng Pilipinas (BSP), which has earlier indicated 25bp cuts during its next two meetings. Abroad, strong US payrolls have allayed recessionary fears, signalling a soft landing. However, gains may be capped as interest rates are now expected to remain elevated abroad, with the market anticipating the US Federal Reserve to slow down the pace of policy rate cuts. The US 10-year Treasury bond yield rose to 3.98% (+0.12 pts) last Friday. <\/p>\n\n\n\n
Heightening conflict in the Middle East may also weigh down on investor sentiment, with Israel\u2019s \u201ctargeted strikes\u201d on Lebanon and fears of Israeli retaliation on Iran\u2019s crude facilities hiking up oil prices and raising fears of war. On the local front, investors may further digest inflation, having fallen below the lower bound of the BSP’s 2-4% target range. A think tank has highlighted this may be reflective of a contributed slowdown in consumer demand. Household consumption in the Philippines has been dampened by higher price levels and borrowing costs in recent quarters, with growth in 2Q24 at 4.6% y\/y being the slowest in 24 years.<\/p>\n\n\n\n
Recommendation<\/strong><\/td>| Buy<\/td><\/tr> | 1-Year Target Price<\/strong><\/td> | PHP 47.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n | <\/div>\n\n\n\n RRHI is currently trading within an upward channel, above key moving averages (20-day, 50-day, 100-day, and 200-day), but nearing immediate resistance at PHP42.00. While the stock shows bullish momentum, the RSI at 62.99 suggests it is approaching overbought conditions, indicating a possible shorter consolidation. We recommend buying at current levels (~PHP40.00), as the overall technical outlook remains positive, with higher lows and increasing volume confirming the trend.<\/p>\n\n\n\n Accumulating RRHI at current levels is advisable. Take profits at PHP46.00 and set stop loss limits below your PHP36.80.<\/p>\n\n\n\n <\/div>\n\n\n\n 2. D and L Industries, Inc. (DNL)<\/h3>\n\n\n\n
|