Stocks to wait for US, PH central bank meet

Published December 8, 2019, 12:00 AM

by manilabulletin_admin

By James A. Loyola

The local stock market may get a boost at the start of the week from the gains in US bourses due to the strong jobs report while investors wait for cues from the meeting of both US and Philippine central banks later in the week.

“The market will be awaiting any update regarding whether there will be additional tariffs on China by the US on December 15. Locally, we will be watching for the last meeting of the BSP,” said Regina Capital Development Corporation Managing Director Luis Limlingan.

Online brokerage 2Tradeasia said “Emotions are bound for a rough patch in the coming days, as December 15’s US tariff implementation deadline on Chinese imports looms.”

“Foremost on this is separating the issue on HK Human Rights & Democracy Act, as well as the Uighur Bill on Muslim minority in Xinjiang versus economics tied to trade.”

These political and trade issues are seen to cause share prices to fluctuate, unless both major parties come to amicable terms.

“Sequels to water concessionaires’ concerns may cast some cloud on the fate of other similar infra projects, especially within capital-intensive utilities,” said 2Tradeasia.

It advised investors to “Learn to look at temporary setbacks as opportunity to move into stocks with fundamentals that have run the test of time. Position on dips gradually.”

COL Financial has a BUY rating on AC Energy “as it is an excellent turnaround and growth story. We believe that PHEN’s long-term outlook would improve with the AC Energy’s plan to inject power generation assets, and given the company’s improved position to expand its renewable energy portfolio with the backing of the AC group.”

The brokerage has a fair value estimated of ₱3.12 per share for ACEPH.
Meanwhile, Abacus Securities has a Trading Buy recommendation for Philippine National Bank.

“We are not advocating a switch from the bigger banks to PNB. At least, not yet. For now, we feel a trading buy is sufficient. Even if it just rises to 50 percent of its adjusted book value (which would still be below its 10-year mean), the stock should be at ₱53,” it noted.

It added that, “We are not sure why the market has been selling it down for the past few weeks but believe PNB is due for at least at a bounce…”
This is because the bank’s shares have been heavily oversold and it is trading at valuations that are far below its peers.

“New management has been aggressive and together with widening interest margins, this should lead to higher core income growth over the next few quarters.

Meanwhile, the corporate actions that officials previously flagged (potential foreign partner, additional sales of acquired assets) are still on the table and may be consummated in the next 6-12 months. Both of these should unlock value for shareholders,” Abacus said.