By James A. Loyola
The local stock market will continue to look to the US for trading cues after most local listed companies have already reported their third quarter performance.
“The domestic market will probably look to the minutes of FOMC (Federal Open Market Committee) meeting, jobless claims and home sales,” said Regina Capital Development Corporation Managing Director Luis Limlingan.
In the domestic front, Limlingan said: “We will watch out for the Balance of Payments. Most major earnings are out so funds may even start to position ahead of 2020 with around 6 to 7 weeks left.”
Online brokerage 2TradeAsia said most of the 30 firms comprising the Philippine Stock Exchange index reported higher-than-expected earnings and, with forecast fourth quarter growth of 7 percent, the price-to-earnings ratio will be at a cheap 16 times and provide a good upside to the five-year average of 27 times earnings per share.
“It should remove notions that current levels are already ‘pricey,’ as each listed stock evolves to achieve their respective valuation potential,” 2TradeAsia said.
However, BDO Chief Market Strategist Jonathan Ravelas pointed out that the PSEi failed to sustain the rally above the 8,000 levels and “the recent break below the 8,000 levels could signal another test towards 7,700 to 7,800 in the near-term.”
Based on recent earnings reports COL Financial and Abacus Securities Corporation are recommending certain stocks which have potential for good returns.
“We currently have a BUY recommendation on GTCAP. We believe that the outlook for Toyota Motors Philippines continues to improve, as reflected by its positive third quarter figures,” COL said.
It noted that, “Over the longer term, we also remain attracted to GTCAP’s portfolio consisting of companies belonging to industries that benefit from rapid economic growth such as banking, automotive, real estate development, infrastructure, and insurance.”