Sideways trading expected this week

The Philippine stock market is anticipated to remain stagnant during this abbreviated trading week, with upcoming third quarter earnings reports potentially providing a much-needed lift before the release of October inflation statistics. The Philippine Stock Exchange index (PSEi) closed below the 5,700 mark last Friday at 5,680.35, a 0.84 percent decline compared to the previous week.

First Metro Investment Corp. research director Cristina Ulang predicts the market will persist in high volatility until the October inflation figures and the ongoing third quarter 2026 earnings season arrive. Ulang anticipates the PSEi remaining within the 5,600 to 5,800 range throughout the week. "We expect trading to remain cautious due to high borrowing costs, inflation worries, and ongoing oil price pressures," Wendy Estacio-Cruz of Unicapital Securities stated.

Estacio-Cruz suggests investors monitor the October inflation data released on November 5 for insights into the Bangko Sentral ng Pilipinas (BSP)’s policy outlook, foreign fund movements, and the peso's trajectory. AB Capital Securities indicates that subsequent third quarter results and the November 9 GDP announcement will serve as the next near-term triggers.

"The market is susceptible if participation remains limited. 5,580 remains a significant support level and a genuine test of underlying demand," the brokerage added. 2TradeAsia.com cautions that investors should pay more attention to forward commentary than the third quarter reports. "Funding rates have increased by 125 basis points since April, and the peso is close to record lows, which suggests that capex projections for 2027 may be delayed or postponed, particularly among property developers and conglomerates with extensive project pipelines," the online brokerage explained.

"This defers stress on balance sheets but essentially results in a demand reduction, which directly impacts cement and construction suppliers." The online brokerage warns that currency fluctuations due to Middle East geopolitical headlines are among the primary risks to watch this week. "A break below 5,600 would signal to reduce exposure further, and we would only add positions if the price closes above 5,800 and sustains after the Federal Reserve's decision is announced," 2TradeAsia.com advised.

The outlook includes a potential double-rate hike, with the Federal Reserve increasing rates on December 9 and the BSP raising rates on December 17. Observations of All Souls' Day will result in no trading today.