Stocks to test higher level

Published November 10, 2019, 12:00 AM

by manilabulletin_admin

By James A. Loyola

Stock analysts saw the PSEi’s close above the 8,000 level as a positive sign, expect it to begin testing the next resistance level this week while investors chew on more corporate earnings 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)

Local stocks could also get a small boost from the record close of US markets last Friday although President Trump had cast doubt on progress in concluding a trade deal with China.

However, analysts noted that investors are still very cautious, pointing out that the news of better-than-expected GDP failed to spur a rally in local stocks.

“Last week’s close at 8,065.76 highlights another try towards the 8,200 to 8,420 levels in the near-term. Failure to break above said levels could lead to more profit-taking and bring the index below the 8,000 levels anew,” said BDO Chief Market Strategist Jonathan Ravelas.

Backed by recent third quarter reports, COL Financial has a recommended a BUY on Robinsons Retail Holdings Inc. which it sees to be “at the forefront in benefiting from the favorable growth opportunities in the retail sector.”

“RRHI is still expected to unlock more efficiencies from realigning the operations of Rustan’s, and this bodes well for RRHI’s growth prospects for the years to come,” COL said.

The online brokerage firm has also issued a BUY rating for the country’s top two telecommunications firms, PLDT and Globe, which reported improvements in their businesses, particularly for fixed and wireless data.

“We continue to like PLDT because of a) the turnaround of its mobile phone business, b) strong position of its fixed line business and c) strong balance sheet to support its aggressive network expansion plan,” COL said.
It added that valuations are also attractive and capital appreciation potential is also substantial.

Meanwhile, COL said “We are increasing our earnings estimates for GLO given the stronger than expected performance for the first three quarters of 2019… while upgrading our recommendation from HOLD to BUY.”

COL is also recommending a BUY for China Bank because of the accelerating growth of its lending income and an expected recovery in its net interest margin as funding cost continues to normalize.

“Meanwhile, efforts to increase its fee income in the recent years with the launch of its credit card, investment banking, and stock brokerage subsidiary have also started to bear fruit,” the firm said.