Range trading seen this week

Published March 17, 2019, 12:00 AM

by manilabulletin_admin

By James A. Loyola

The local stock market is seen to trade within a tight range, as economic news at the home front is less than encouraging.

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)

“The main index may continue to trade between the trading range between 7,600 and 7,900 in the coming weeks,” said Eagle Equities Head of Research Christopher Mangun.

He noted that, “despite improving economic fundamentals, the government has cut its 2019 GDP growth target to 6 to 7 percent from 7 to 8 percent citing a delay in final legislative approval of the budget.”

Mangun added that, government has also raised its inflation target to 3 to 4 percent instead of 2 to 4 percent and investors may have been expecting this, thus the cautious sentiment.

“Another factor is the depreciation of the local currency. In the last couple of years, there seems to be a correlation between extremes in the currency market and the stock market. The main index tends to go lower as the currency gets weaker and higher as the currency gets stronger,” he said.

Mangun said that “overall, the strategy has been to pick up second-liners with good growth prospects.
Investors also await the outcome of the first monetary board meeting of BSP Governor Ben Diokno. He expressed there’s scope to ease.”

For its part, online brokerage 2TradeAsia.com said investors should continue to scout for stocks with significant upside potentials even as risks are still present with a stalled fiscal budget approval for the year.”

Among its new stock picks, Abacus Securities Corporation highlighted Eagle Cement Corporation which is seen to post strong earnings growth as cement prices are expected to rise with tariffs on imports while margins improve after coal prices have weakened.

The El Niño phenomenon is also seen to be a boon for cement firms as it will boost construction activity.

Meanwhile, both COL Financial and Abacus reiterated their BUY ratings for First Gen Corporation noting that there may be an upgrade in its target price after it posted better than expected earnings for 2018.

 
CLICK HERE TO SIGN-UP
 

YOU MAY ALSO LIKE

["business","business"]
[941412,2774176,2774180,2774100,2774083,2774078,2774089]