Stocks seen to move sideways

Published January 27, 2019, 12:00 AM

by manilabulletin_admin

By James A. Loyola

The Philippine stock market is seen to consolidate this week as investors digest gains from the rally that kicked off the new year and build a base at the 8,000 level.

Traders work beneath a monitor and an electronic ticker at the trading floor of the Philippine Stock Exchange in Bonifacio Global City (BGC), Metro Manila.(Bloomberg file photo)
Traders work beneath a monitor and an electronic ticker at the trading floor of the Philippine Stock Exchange in Bonifacio Global City (BGC), Metro Manila.(Bloomberg file photo)

“We may continue to see to see it trade sideways with a slight negative bias as investors take some profits after the incredible run that we have seen in the last 3 weeks,” said Eagle Equities Head of Research Christopher Mangun.

He noted that, “the main index is up 7.8 percent for the month and even if we see it drop 1 to 2 percent (this) week, it will still end as one of the best months that we have had for a while.”

However, Mangun said that, “if we see a pick of trading volumes and foreign inflows, it may just defy gravity and break through resistance at 8,100 and perhaps end the month as one of the best in history.”
Online brokerage firm 2TradeAsia.com said market’s movement will also be influenced by month’s end window dressing, the anticipated approval of government’s budget, and anticipation of the January inflation rate.

“Also, markets would soon be pricing-in the week-long Chinese Lunar New Year break (February 4 to 10),” it noted adding that, “upsides may be considered, pending the outcome of US-China trade talks before end-March’s deadline. Range-trade and go for stocks with commendable upside opportunities.”

Among Abacus Securities Corporation’s top picks is gaming firm Bloomberry Resorts Corporation as it has recently upgraded the target price to P14.00 from P10.90 because of strong growth in casino revenues plus a possible entry into the Philippine Stock Exchange composite index by March.

Abacus is also bullish about First Philippine Holdings because its stock price has lagged behind other Lopez companies and is trading just 5 times its earnings and less than half of its book value.
For its part, top online brokerage firm COL Financial is recommending a BUY on Cebu Air as earnings is seen to grow faster after jet fuel prices have dropped significantly.

COL is also recommending Cemex Holdings Philippines Inc. as the firm is seen to be the biggest beneficiary from government’s decision to impose a safeguard duty on imported cement. It is also expected to register lower costs and higher productivity this year.

Another stock COL is asking investors to consider is SM Prime Holdings Inc. because of rising property prices in the Bay area while management remains confident of being able to push through with its reclamation project.

SM Prime’s malls are also seen to register higher sustainable growth.

BDO Chief Market Strategist Jonathan Ravelas said the close at 8,053.20 last week “signals the market still has the momentum to try the 8,150 levels, as we touched the 8,116.23 intra-week high.”

He noted though that, “failure for the market to stay above the 8,000 levels could signal more profit-taking activities back to 7,500 to 7,800 levels.”

 
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