Market seen consolidating this week

MANILA, Philippines — The stock market will likely see another week of consolidation.

In a research note, BDO said last week’s finish of the Philippine Stock Exchange index at 7,871.11 “continues to signal the market to consolidate within the 7,700 to 8,000 levels in the near-term.”

Last week, market barometer PSEi fell by 1.52 percent week-on-week to settle at 7,871.11 as investors remained defensive ahead of the Bangko Sentral ng Pilipinas meeting next week.

BSP Governor Benjamin E. Diokno has said that another 25-basis point reduction in benchmark interest rates may happen this week.

So far, the BSP has reduced benchmark interest rates by 50 bps.

Inflation has been declining partly after the government liberalized importation of rice. It slipped to a three-year low of 1.7 percent in August.

Gabriel Perez of Papa Securities also said that the catalyst this week would now be the BSP’s policy decision.

“Consensus expects the central bank to cut by 25 basis points,” Perez said.

Traders will also be looking at the initial public offerings in the pipeline this week.

The first to list for the year will be coconut product manufacturer and exporter Axelum Resources Corp. which has set the offer price for its IPO at P5 per share.

The offer period will run from Sept. 24 until Sept. 30, with the target listing date on Oct. 7.

Axelum plans to sell 700 million primary shares and 100 million secondary shares for a stock market debut of P4 billion.

The net proceeds from the primary offer will be used to fund the company’s strategic acquisitions, expand its domestic and international distribution networks, install new manufacturing facilities for new products, and improve and expand the company’s existing manufacturing facilities.

“A portion of the proceeds will also be utilized to retire the company’s loans, reduce payables, and for other capital expenditure requirements,” it said.