Last week, the PSEi dropped by 2.45% week-on-week, closing at 6,613.85. This was mainly due to the sustained weakness of the Philippine peso (PHP) against the US dollar (USD), which dipped to its lowest in two years since Oct 2022, at around PHP59 per USD. Midweek, the market attempted to erase some gains amid bargain hunting post MSCI rebalancing on 26 Nov 2024. Despite a surge in trading volume, the PSEi still closed the day in the red, reflecting persistent selling pressure. Meanwhile, the announcement made by US President Trump regarding heightened US tariffs against Canada, China, and Mexico also contributed to the decline. Foreign flows posted a PHP1.25bn net outflow as a result of the aforementioned events. The week closed with muted volume as the US market was closed for the Thanksgiving Holiday on 28 Nov 2024.<\/p>\n\n\n\n
This week, we expect the PSEi to trade sideways with a slight upward bias due to bargain hunting following last week’s lower close. Technical indicators are approaching oversold territory, suggesting potential for a short-term rebound. Investors are also expected to observe the inflation rate for Nov 2024 which is projected by the Bangko Sentral ng Pilipinas (BSP) to range between 2.2 to 3%, this is higher compared to 1.3% inflation in Oct 2024. This was on the back of the food supply problem caused by typhoons, increasing cost of electricity, and weakening of PHP against USD. Nevertheless, the BSP forecast is still in line with the 2 to 4% target range. Meanwhile, oil prices are projected to decline for the remaining weeks of 2024 due to a decrease in overall demand.<\/p>\n\n\n\n
Recommendation<\/strong><\/td>| Buy on breakout<\/td><\/tr> | 1-Year Target Price<\/strong><\/td> | PHP 29.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n | <\/div>\n\n\n\n As PLUS grows closer to acquiring a federal licence to operate online gaming services in Brazil, we believe its entrance to the country could catalyze another growth leg to sustain its outstanding performance over the past two years. With almost twice the population of the Philippines at 211 million and almost thrice the GDP per capita at USD10,043, the Brazilian iGaming market could provide ample runway for topline expansion. Backed by a healthy balance sheet, we believe that PLUS has the expertise and resources to replicate its success in the Philippines to South America.<\/p>\n\n\n\n Accumulating PLUS once it breaks above the downtrend resistance line around its support at PHP21.20 is advised. Take profits at PHP24.35 and set your stop loss below PHP 19.50.<\/p>\n\n\n\n <\/div>\n\n\n\n 2. Manila Water Company, Inc. (MWC)<\/h3>\n\n\n\n
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