By James A. Loyola
The local stock market is seen to move sideways as investors take on a more cautious stance amid concerns over the coming elections, the US-China trade negotiations and the slowing growth of the world economy.
Traders work beneath an electronic ticker at the trading floor of the Philippine Stock Exchange in Bonifacio Global City (BGC).(Bloomberg file photo)
“The market may be more inclined to trade within range for now, until after local elections are finalized in May,” said online brokerage firm 2TradeAsia.com.
Eagle Equities Head of Research Christopher Mangun noted that, “If we continue to see thin trading volumes, the main index may continue trading sideways between 7,600 and 7,900 in the coming weeks.”
He said, “This may be attributed to the fact that the general investor sentiment is cautious as is all over the world over concerns on the U.S.-China trade deal and worries over the slowdown in global growth.”
Once Congress resumes working on pending bills, 2TRadeAsia.com recommends that investors take a look at stocks belonging to sectors that have long lagged due to policy delays such as mining, oil exploration, renewable energy and real estate.
Top online brokerage firm COL Financial has upgraded its recommendation for PLDT from “HOLD” to “BUY” with a fair value estimate of P1,360 per share.
COL said outlook for PLDT has improved due to signs that the turnaround of the mobile business is gaining momentum, the deconsolidation of Voyager should reduce PLDT’s share in the company’s losses; and PLDT’s strong 2019 earnings guidance of its core telco operations (excluding Voyager) of P26 billion.
The brokerage is also maintaining its BUY recommendation for First Gen Corporation because of the approval for it to build a liquefied natural gas terminal which will ensure fuel supply to its gas plants.
Also recommended by COL is Aboitiz Power Corporation after the firm delivered higher-than expected earnings growth.
While the global picture is not so rosy, Mangun noted that “Philippine economic fundamentals continue to improve. Decreasing inflation and stronger corporate earnings growth will improve market sentiment in the longer-term.”
“If inflation stays below 4 percent in the coming months, we may see the BSP cut interest rates which will be a major catalyst for the equities market,” he said.
BDO Unibank Chief Market Strategist Jonathan Ravelas said the PSEi’sclose at 7,797.11 last week highlights some support exists near 7,500 levels.