Interest rates, window dressing to boost stocks

Published March 24, 2019, 12:00 AM

by manilabulletin_admin

By James A. Loyola

The local stock market will likely see more activity this week on account of the US and Philippine banking authorities’ decision to keep interest rates steady as well as due to some month’s end window-dressing.

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)

“With little changes seen for yields on fixed income instruments, several are anticipating funds to flow back into equities, especially those that provide consistent and high dividend yields,” said online brokerage firm 2TradeAsia.com.

With steady rates, property developers will benefit as many will scout for investment opportunities such as condo units that can be leased out, affordable housing, even leasing commercial properties for franchising/store operations.
It also noted that, “those in capital-intensive industries would benefit, as infra-based projects are expedited.”

Meanwhile, 2TradeAsia.com said first quarter 2019 portfolio closing will highlight the week, which might prod liquidity positioning in select large- and mid-caps.

As the second quarter approaches, 2TradeAsia.com also advises investors to consider sector plays that would do well in May’s election run, specifically those tied to consumer and investment spending.

Improved travel should also merit listed shares with tourism-related business models.

Demand-driven summer season would also boost power and energy-related stocks.
Abacus Securities Corporation is recommending a buy for LT Group after valuations for subsidiaries Asia Brewery, Tanduay and Eton were raised on better than expected 2018 earnings.

Online brokerage firm COL Financial is recommending a buy on East West Bank after its 2018 earnings beat estimates on higher-than expected non-interest income.

COL is also bullish on another lender, Philippine National Bank because “recent quarters have shown an acceleration in the bank’s core income growth. Overall, we like PNB as a turnaround play given its efforts to improve profitability coupled with revenue and cost synergies that are expected to result following its merger with Allied Bank.”

COL also likes consumer stock Max’s Group Inc. following its positive results for 2018. “We continue to believe that MAXS deserves to trade in line with its peers given its similarly attractive medium-term outlook, its strong brand portfolio, proven track record of growing revenues, as well as the recovery of margins from a very low level in 2017,” it noted.

 
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