Will bargain-hunting, window-dressing lift stocks?

Published December 22, 2019, 12:00 AM

by manilabulletin_admin


The last trading week of the year is expected to be subdued as investors celebrate Christmas although there are hopes that prices will be lifted by continued bargain-hunting as well as some window-dressing.

“Monday will be quiet ahead of the holidays while year-end window dressing likely last two trading days. Support is 7,500 while resistance is 7,800,” said Regina Capital Development Corporation Luis Limlingan.

Online brokerage 2Tradeasia noted that, towards the end of last week, market players shopped for bruised shares, ahead of the shortened trading week.
The firm said it expects the market to end 2019 “Not with a bang, but with a whimper.”

“Left to a shortened three-day trading week, improved volumes from funds’ window dressing will be balanced against those who will opt to wait out the Yule break,” said 2Tradeasia.

It added that, “As we ruminate on the growth story of the upcoming ‘2020s,’ a review of the ‘2010s’ reveals to us that stocks with sound revenue-generating models and consistent capital expansion programs, likely — and often — stand the test of time. Buy the dip.”

Meanwhile, BDO Chief Market Strategist Jonathan Ravelas warned that, last week’s close at 7,773.12 “highlights the risk of a test of the year’s low at 7,514.05.”

Coincidentally, stock brokers are recommending stocks of several Gokongwei-controlled firms due to improving prospects while prices remain low.

“We are raising our fair value estimate for RLC (Robinsons Land Corp.) to ₱31.10 from ₱29.82 as we factored in higher same-mall-revenue growth and higher occupancy for office projects,” said top online brokerage firm COL Financial.

IT added that, “We also factored in higher lease rates for RLC’s future office projects as we expect low vacancy rates to continue supporting higher lease rates. We reiterate our BUY rating on RLC as it continues to improve on its residential segment. On top of this, RLC’s investment properties remain robust as it capitalizes on healthy domestic consumption and strong demand for office space.”

COL is also recommending a BUY for Robinsons Retail (RRHI) “given its well-diversified portfolio of retail formats. This puts the company at the forefront in benefiting from the favorable growth opportunities in the retail sector.”

“In addition, RRHI has made good progress in integrating and rationalizing Rustan’s. Going forward, 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,” it noted.

For its part, Abacus Securities is recommending Cebu Air because of its expansion plans, noting that, “Besides expanding their provincial and international routes, CEB is circumventing the limitations of the NAIA Airport by taking delivery of new planes with higher seat capacities (8-10 percent yearly seat growth) while also investing in these new planes that save on fuel by as much as 15 percent.”

“This should fuel earnings growth for CEB in the coming year on the assumption that the exchange rate and oil prices are more stable. We believe our target price of ₱125.00 is reasonable and we maintain our BUY rating on the stock,” it noted.