Investor sentiment this week is seen to be influenced by the release of key economic data as well as signs of how much of the economy the government will allow to reopen while new COVID-19 cases remain high.

“Next week, the market is expected to take its cues from the upcoming economic data,” said Philstocks Financial Senior Analyst Japhet Tantiangco.

He noted that, “First, we will be having the Philippines’ Nikkei Manufacturing PMI which would give us an idea of how the reimplementation of the MECQ (modified enhanced community quarantine) in selected areas in Luzon from August 4 to 18 has affected our manufacturing sector.”

Next will be the release of the unemployment rate for July 2020, which Tantiangco said “could be the highlight of the week for the market. Here we’ll be given a better picture of how our labor market situation has been amid the earlier imposed strict quarantine measures which were eased later on.”

He warned that, “Our April 2020 unemployment rate stood at 17.7 percent. A figure higher than this one could pull the local market down.”

Online brokerage 2TradeAsia.com said the market will also be swayed by concerns of a possible La Niña phenomenon as well as “guidance from the government on how to proceed with community quarantines, which ultimately will dictate the shape of third quarter gross domestic product.”

BDO Chief Market Strategist Jonathan Ravelas said “the confidence in economy remains pinned down by the steady stream of new COVID-19 cases. Improvement in investor sentiment hinges on earnings and further reopening of the economy.”

He added that, “(last) week's close at 5,884.18 highlights the market's vulnerability to sell-offs continue to see the market to range between the 5,700-6,000 levels in the near-term.”

With the recent weakness in stock prices, COL Financial is maintain a BUY rating for Aboitiz Power Corporation because, “despite the poor first half of 2020 results, we believe that AP’s earnings already bottomed in the second quarter as a result of the impact of the Covid-19 pandemic.”

It added that, “AP’s valuation has also become increasingly attractive with the stock trading at 10.8 times 2021 price-to-earnings ratio, below its 10-year historical average of 12.7 times.”

  Abacus Securities Corporation sees some upside for nickel mining companies such as Nickel Asia Corporation because demand for nickel is seen to rise close to ten-fold over the next decade based on the long term projections for the electric vehicle market.

  The brokerage also sees potential of a bounce for SSI Group noting that its market valuation is just P3.4 billion when its end-June cash level alone is already P3 billion.

  “What this means is that this puts a short-term floor price for the stock. Since its brands cater to the high-income shoppers, who are less affected by the pandemic, any positive development for the industry may begin pushing the stock higher,” Abacus noted.