PHILIPPINE SHARES rose month on month in October despite being in the 5,000 level in its first two weeks amid worries over the US central bank’s tightening path, rebounding from a decline in September.

The Philippine Stock Exchange index (PSEi) closed at 6,153.43 on Oct. 28, the last trading day of October, up by 7.18% from its Sept. 30 finish of 5,741.07.

“For October, the PSEi already gained by 7.2% for the month, after declining by 12.6% in September 2022,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message on Friday.

The PSEi’s month-on-month gain came even as it traded below the 6,000 mark from Oct. 3 to Oct. 17, as well as on Oct. 21, amid recession fears due to the US Federal Reserve’s aggressive rate hike cycle and inflation concerns here and abroad.

Towards the end of the month, the index rebounded on bargain hunting and as investors took positions ahead of the release of firms’ third-quarter financial results.

Still, for the year so far, the benchmark index has declined by 13.61% from its Dec. 31, 2021 close of 7,122.63.

For this month, COL Investment Management, Inc. President Marvin V. Fausto said investors will remain cautious due to the policy meetings of the Fed on Nov. 1-2 and of the Bangko Sentral ng Pilipinas (BSP) on Nov. 17.

“For the rest of November, investors and traders will be watching for signs that inflation is decelerating and will gauge the resolve of central bankers in terms of their commitment to stick with tightening monetary policy,” Mr. Fausto said in an e-mail on Friday.

“We look forward to a better fourth quarter since from a seasonality perspective, fourth quarter the best performing quarter for Philippine equities,” he added.

China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said earnings will continue to drive trading for the first two weeks of this month, with firms expected to release their results until Nov. 15.

“On the 10th, 3rd quarter GDP (gross domestic product) will be reported, and while expectations have been tempered the print will give funds a bigger sense of the impact of policy tightening and will be a guide to better project,” online brokerage said in a market note.

“Mid-November, another round of Fed rate hikes is anticipated. the BSP is expected to mirror the Fed on the 17th to protect the peso,” said. “Expect November to pull investor focus in multiple directions, given macro events unfolding for the month. The US midterm elections on the 8th, while not groundbreaking, might cause some volatility especially if the US chambers.”

Meanwhile, Mr. Ricafort said the PSEi may be lifted by window-dressing activities ahead of the year’s close. — AEOJ