Stock market investors are seen to remain cautious this week and will be looking to the US Federal Reserve’s meeting for cues on whether to buy into the market or wait for more catalysts.
Online brokerage firm 2TradeAsia.com said results of the Fed’s first convening will be announced on September 17 (Manila time). This comes after Chairman Jerome Powell announced that they will be more tolerant of inflation.
“Hopes are up, therefore, for more encouraging message which, in turn, may help ease risk-off sentiment stemming from both COVID-19 and geopolitical concerns,” it noted.
The brokerage added that, “Deeper cuts, while generally not expected this soon, will resonate with regional central banks, particularly the Bangko Sentral, to maintain a favorable currency differential.”
“Although narrowing trading bands can mean many things from a technical standpoint, it is most commonly of 'indecisiveness;’ that is, the market is left wanting for a 'shove’ strong enough to breakout or breakdown from the current trend.”
BDO Chief Market Strategist Jonathan Ravelas said that, while the market rallied last week on optimism after acting Economic Planning Chief Karl Chua said the nation plans to further reopen the economy, it remains in a consolidation mode.
“Continue to see the market to range between the 5,700 to 6,000 levels in the near-term,” he said.
With investors cherry-picking bargain stocks, COL Financial is recommending shares of Universal Robina Corporation.
“Despite the challenging economic environment due to COVID-19, URC has shown its resilience. We think this is a good sign that the company is prepared and well-equipped to weather through additional challenges that may come amid the deepening effects of the global pandemic,” COL noted.
It added that, “We also like URC for its positive long-term growth prospects, and we remain confident in the company’s ability to revitalize its business and return to previous levels of profitability.”
Meanwhile, Abacus Securities Corporation has rated Integrated Micro-electronics Inc. (IMI) as the planned overseas public listing of a subsidiary is seen to boost its value. “Compounded with the long-term growth prospects of electric vehicle sales, electrification and digitization of car parts, we believe IMI should be valued (higher),” it added.(