By James A. Loyola
The Philippine stock market is seen to continue to trend higher, although at a slower pace compared to last week, as foreign funds continue to flow into local equities, particularly blue chip issues.
Stock analysts say that the market’s movement this week will be influenced by the release of the gross domestic product report for the last quarter of 2018 as well as developments in the US-China trade talks.
“The market is extremely strong right now with turnover value picking up dramatically as well as foreign inflows. For next week, we may see it trade sideways as it climbs slowly which is the optimum situation,” said Eagle Equities Head of Research Christopher Mangun.
Online brokerage 2TradeAsia.com said investors should “anticipate healthy technical breathers and gradually position buy entries on stocks poised to perform this year.”
Top local online brokerage firm COL Financial recommends Nickel Asia Corporation noting that, “while the relaxation of Indonesia’s ore export ban will likely continue to put a downward pressure on negotiated contract prices, we believe that NIKL’s earnings could remain resilient given its ability to increase production volume and shift its focus to higher value ore.”
Meanwhile, COL said its top picks among consumer stocks for this year are Max’s Group, Inc. and SSI Group, Inc., because both have more attractive earnings growth potential compared to peers in its sector and both are trading at a relatively attractive valuation.
Abacus Securities Corporation is recommending Alliance Global Group, Inc. event though the stock has jumped 30 percent since last November 17.
“We have updated our NAV (net asset value) table for AGI… to P23.80 per share. To be conservative, we continue to apply a 30 percent discount to arrive at our target price of P16.66 which represents decent upside of 25 percent. At this level, AGI would only be trading at 10 times consensus 2019 earnings,” it explained.
Mangun said that if foreign funds continue to flow into the market, “We may see it back at 9,000 sooner than we think. Next resistance comes in at 8,100 and then 8,300. GDP numbers for the last quarter of 2018 is expected to come in next week and if it comes in above expectations, then we may see it reflected in the market’s performance.”
He also noted that, property sector has been lagging behind in the recent rally and, “If we see property companies break new highs in the short-term, then this would fuel the rally and carry the PSEi even further.”
BDO Chief Market Strategist Jonathan Ravelas said, “The market still has the momentum to try the 8,150 levels, as we touched the 8,057.57 intra-week high (last week). Failure for the market to stay above the 8,000 levels could signal more profit-taking activities back to 7,500/7,800 levels.