SONA, H1 earnings to dictate local stocks

Published July 21, 2019, 12:00 AM

by manilabulletin_admin

By James A. Loyola

Market sentiment has improved after last week’s rally although local stock investors are seen to take their cue from what the President Duterte has to say in his State of the Nation Address today, July 22, as well as first half results.

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

“Gauges are good… Range tradability has improved 42 percent to 266 points (8,153-8,419) from prior week’s 187 points; average net turnover grew 23 percent to P7.33 billion; and average net foreign buying widened to P781 billion from only P120 million,” noted online brokerage firm 2TradeAsia.

It explained, “These are good signs for improving appetite for risk, anchored mainly on monetary easing measures from the Fed and with BSP.”

According to the stock brokerage, investors will focus on what the President will say about the administration’s fiscal agenda, efforts on the peace and order situation (especially for the West Philippine Sea), and sequels on infra drive.

It added, “Markets will heed for first half earnings results, as well as guidance how the second half would fare. With the upcoming ‘Ghost Month’ however, expect some players to seize on intra-day rallies.”

Puregold Price Club is getting positive recommendations from both Abacus Securities Corporation and SB Equities due to its strong growth momentum. Both firms also note that the stock is currently undervalued.

Interestingly, both brokerage firms are also recommending that investors buy shares of Metrobank as it should benefit from lower funding costs while trading gains should also improve with falling interest rates.

However, AAA Equities Head of Research Christopher Mangun cautioned that, “for next week, we may see some profit-taking in the banks after their solid performances last week.”

Meanwhile, Mangun said investors are expecting better corporate earnings for the second quarter and, “if we see an increase in traded value on top of more foreign fund inflows, we may see (the PSEi) reach that resistance level (8,480) in no time.”

 
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