Energy, retail in focus
Published Dec 9, 2018 12:00 am
By James A. Loyola
Stock analysts are divided on whether there is yet to be a Christmas rally or local stocks may have peaked in the previous week in what should have been called a “Thanksgiving rally.”
PSEi logo
While Philippine shares posted some gains last week, some analysts are worried about global headwinds which pared off gains at the latter part of the week.
Abacus Securities Corporation noted that, the PSEi’s rally recently met resistance and was not able to stay above its key moving average line of 7,581 — thus the rally is showing signs of waning, “signaling that a bout of profit-taking may be in the offing.”
Papa Securities Analyst Arbee Lu said it “looks like the PSEi is continuing its way down our nearest resistance at 7,381. That's just another 1 percent drop away. We should begin to see some names starting to pick as we expect the index to bounce as we approach that level.”
However, Eagle Equities Head of Research Christopher Mangun noted that, “trading volumes have been increasing for the last 5 weeks which is a very good sign. Foreign funds have been trickling back. With inflation getting better and the currency getting stronger, there is still strong indication that investors will begin to see the market in a better light and start getting back in.”
For his part, BDO Unibank Chief Market Strategist Jonathan Ravelas said “(last) week's close at 7,461.06 signals momentum is accelerating. The rally still has some steam to carry it towards the 7,800/8,000 levels in the near-term.”
Online brokerage firm 2TradeAsia.com is a bit more cautious, saying that, “if conditions go well in maintaining momentum, there might be chances for gauges to test 7,900-8,000. The only condition that could jolt this trend, is if the US-China trade issue spirals anew and nerve-breaking calls are made In OPEC.”
In this light, 2TradeAsia.com said “expect volatile swings before yearend, as large fund managers re-tool their portfolios based on their internal risk-return matrix. The approach on equities might be tilted more on defensive plays, possibly repositioning cash In favor of sectors that are at their nascent recovery stage (1.e., energy, retail).”
Among the top picks of Abacus and COL Financial is First Gen Corporation which had announced that it has found a foreign partner for its planned liquefied natural gas terminal.
“It will allow FGEN to proceed with the construction of new plants and will protect the company when Malampaya's reserves run out by 2024,” said Abacus.
COL Financial is also recommending a BUY for Petron Corporation given the improvement in its yields arising from its expansion plans. “Moreover, valuation remains attractive,” the firm said.
For index stocks, Abacus has recommended that investors “look for longer term returns from laggards like SCC, PGOLD and even SMC.”
PSEi logo
While Philippine shares posted some gains last week, some analysts are worried about global headwinds which pared off gains at the latter part of the week.
Abacus Securities Corporation noted that, the PSEi’s rally recently met resistance and was not able to stay above its key moving average line of 7,581 — thus the rally is showing signs of waning, “signaling that a bout of profit-taking may be in the offing.”
Papa Securities Analyst Arbee Lu said it “looks like the PSEi is continuing its way down our nearest resistance at 7,381. That's just another 1 percent drop away. We should begin to see some names starting to pick as we expect the index to bounce as we approach that level.”
However, Eagle Equities Head of Research Christopher Mangun noted that, “trading volumes have been increasing for the last 5 weeks which is a very good sign. Foreign funds have been trickling back. With inflation getting better and the currency getting stronger, there is still strong indication that investors will begin to see the market in a better light and start getting back in.”
For his part, BDO Unibank Chief Market Strategist Jonathan Ravelas said “(last) week's close at 7,461.06 signals momentum is accelerating. The rally still has some steam to carry it towards the 7,800/8,000 levels in the near-term.”
Online brokerage firm 2TradeAsia.com is a bit more cautious, saying that, “if conditions go well in maintaining momentum, there might be chances for gauges to test 7,900-8,000. The only condition that could jolt this trend, is if the US-China trade issue spirals anew and nerve-breaking calls are made In OPEC.”
In this light, 2TradeAsia.com said “expect volatile swings before yearend, as large fund managers re-tool their portfolios based on their internal risk-return matrix. The approach on equities might be tilted more on defensive plays, possibly repositioning cash In favor of sectors that are at their nascent recovery stage (1.e., energy, retail).”
Among the top picks of Abacus and COL Financial is First Gen Corporation which had announced that it has found a foreign partner for its planned liquefied natural gas terminal.
“It will allow FGEN to proceed with the construction of new plants and will protect the company when Malampaya's reserves run out by 2024,” said Abacus.
COL Financial is also recommending a BUY for Petron Corporation given the improvement in its yields arising from its expansion plans. “Moreover, valuation remains attractive,” the firm said.
For index stocks, Abacus has recommended that investors “look for longer term returns from laggards like SCC, PGOLD and even SMC.”