• SHARES OUTLOOK FOR THE WEEK:

    BSP policy meeting a likely market catalyst

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    THE market is likely to keep an eye on the Monetary Board policy meeting this week to look for clues on when the Philippine central bank will raise interest rates.

    The policy meeting on June 22, Thursday, will be the final meeting chaired by Amando Tetangco Jr., who retires on July 2 after serving two consecutive six-year terms as Bangko Sentral ng Pilipinas (BSP) governor.

    “After the Fed decided to raise benchmark rates by 25 basis points and the Bank of Japan (BoJ) kept its rates steady, the focus will now shift to our own Monetary Board for its policy meeting,” online brokerage firm 2TradeAsia said.

    “However, consensus points towards an unchanged rate as May’s inflation settled lower at 3.1 percent,” it added.

    Likewise, bets are on that the same unchanged policy story might prevail during the early part of the third quarter, with crude futures trading lower.

    “Moving forward, the BSP is seen to raise benchmark rates by at least 25 bps before the year ends, to keep pace with benchmark securities and expectations of improved demand in the second half that may support higher pricing,” it said.

    “Trade selectively and position on lows. Gauges need to stabilize for now, to support rises to higher terrain,” the online brokerage firm noted.

    The market will also be taking cues from its US counterpart and the release of homebuilding data which fell for the third month in May to the lowest in eight months as construction activity declined, said Luis Limlingan, managing director at Regina Capital Development Corp.

    “Last week, in a surprising turn of events, not only did the PSEi fail to break its psychological limit—yet again—it also undid all the aggressive trading in the morning session which saw the index breach the 8,008 weekly resistance level, Limlingan said.

    On Friday, the benchmark PSEi dropped 1.03 percent or 82.27 points to close at 7,882.22. The broader All Shares dipped by 0.69 percent or 32.41 points to settle at 4,695.15.

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