Last week, the index decreased by 433.61 points to 5,862.59 (- 6.89% w\/w), marking its lowest close since October 2022, due to weak macroeconomic data and PSEi rebalancing results. The 4Q 2024 GDP print fell to 5.2%, below Bloomberg\u2019s 5.8% estimate and the government\u2019s 6%-6.5% target, due to weather disruptions and delayed effects of monetary policy hikes. Additionally, February’s PSEi rebalancing led to declines, as index weights were adjusted for AREIT and CBC. These new entries’ higher market capitalization compared to removed stocks NIKL and WLCON contributed to selling activity.<\/p>\n\n\n\n
This week, we expect the market to rebound following four consecutive weeks of decline due to bargain hunting. Nonetheless, sentiment will remain cautious given the macroeconomic weakness indicated by the 4Q 2025 GDP and the recent tariffs imposed by the U.S. on Canada, China, and Mexico, which could potentially lead to a trade war. All eyes on the inflation data for January 2025, which the Bangko Sentral ng Pilipinas (BSP) projects to settle within the range of 2.5% to 3.3%, aligning with its target range of 2% to 4%.<\/p>\n\n\n\n
Recommendation<\/strong><\/td>| Trailing Stops<\/td><\/tr> | 1-Year Target Price<\/strong><\/td> | PHP 41.33<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n | <\/div>\n\n\n\n AREIT is trading at 5.74% dividend yield, implying a premium relative to the Philippines’ 10-year bonds 6.23% yield and indicating that much of the positives for the counter are already priced in. Furthermore, we anticipate a “sell on news” reaction that could add downward pressure, given AREIT\u2019s recent price movement when the rebalancing was announced. Therefore, we recommend implementing trailing stops for AREIT in the short term and will reassess for a more favourable entry point once the stock stabilises.<\/p>\n\n\n\n For those with exposure, implementing trailing stops is advisable.<\/p>\n\n\n\n <\/div>\n\n\n\n 2. Wilcon Depot Inc. (WLCON<\/h3>\n\n\n\n
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