The local stock market is seen to continue to consolidate this week due to the absence of any market moving news.

“So far, confidence towards the local market remains low due to the lack of an impetus that could boost appetite amid the lingering uncertainties in our economy and in our COVID-19 situation,” said Philstocks Financial Senior Analyst Japhet Louis Tantiangco.

He noted that, “Trading has been lethargic with (last) week’s net value turnover averaging P4.9 billion, below the year-to-date average of P5.9 billion, conveying that many investors are still staying on the sidelines amid the market risks.”

“Given the low confidence, tepid trading, and strong net foreign outflows, our market has been unable to stage a significant rally and establish a position above the 6,100 resistance,” Tantiangco said.

Online brokerage firm 2TradeAsia.com pointed out that, potential catalysts are not expected until October. These include the Bangko Sentral’s policy meeting on October 1, 2020 and third quarter earnings reports by listed companies.

“Moving forward, as the market still lacks a strong positive catalyst, we may see more selling pressures next week. Value turnover could remain thin while net foreign selling may continue. Thus, the PSEi could trade with a downward bias within the 5,700 - 6,100 range,” said Tantiangco.

BDO Chief Market Strategist Jonathan Ravelas said investor sentiment has been weighed down “after the BSP expects the economy to contract further this quarter, driven by continued deterioration in the industry and services sectors.”

“It also pointed out, that there are limited improvements in mobility indicators that suggest the public is opting to stay at home, which could affect retail sales and spending for other non-essentials, the same factors that pulled down consumption growth in the previous quarter. As a result of these observations, investor sentiment further soured,” he said.

Ravelas said the local market remains vulnerable to sell-offs and will continue to range between the 5,700-6,000 levels in the near-term.

Amid this backdrop, COL Financial is recommending a Buy for shares of Philippine National Bank following news of its plan to sell prime properties worth $1 billion.

“We view the planned sale positively as this accelerates the disposal of its non-performing assets, allowing PNB to reallocate the funds into interest-earning assets and improve its profitability,” COL said.

COL also has a BUY rating on PLDT because of the strong growth of its mobile data business; its dominant position in the home broadband business; new opportunities in the enterprise segment, and its strong balance sheet.