Stocks turn sights on Fed
The local stock exchange is headed to another week of vulnerability, as investors keep an eye out on another policy-setting meeting of the US Federal Reserve, though most analysts predict rates would hold.
The Philippine stock exchange anticipates another week of uncertainty as investors remain cautious ahead of the Federal Reserve's policy-setting meeting, according to a report from <source 5b87d16a-859>. Analysts predict that interest rates may remain unchanged, although investors are advised to brace for potential volatility due to upcoming economic reports.
Unicapital Inc.'s head of research, Wendy Estacio-Cruz, noted that trading volume will likely be light as investors prepare for the Fed meeting and the release of US economic growth and personal consumption expenditures inflation data. They may also adjust their portfolios before the upcoming national holiday of Undas. Earlier this week, the Bangko Sentral ng Pilipinas (BSP) raised the benchmark interest rate by 50 basis points to 5.5%, aiming to curb borrowing costs and inflation.
This rate hike poses challenges for investors in high-leverage sectors like real estate, particularly as the Philippine peso hit a record low of 63.615 to the US dollar last Friday. F. Yap Securities Inc. echoed similar concerns, advising investors to stay out of trading until the Fed delivers its final decision. The firm recommended reducing exposure further if the benchmark Philippine Stock Exchange index (PSEi) falls below 5,600.
F. Yap Securities urged a cautious approach, focusing on dollar-earning assets and well-capitalized companies while avoiding rate-sensitive investments. Mynt Inc., the parent company of GCash, emerged as a notable stock to monitor. If Mynt's shares fall below their IPO price of P6.6, it may indicate a failure to attract new capital, potentially impacting the broader IPO market on the PSE.
Mynt's IPO last week set a record for the largest in Philippine history, raising P60.9 billion and valuing the company at P442 billion at its debut. Despite this success, the PSEi's momentum falters as it dropped 54 points to close at 5,728.63, reflecting market sentiment influenced by the BSP's rate increase.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
