The local stock market is seen to continue to be weighed down by concerns over the COVID-19 pandemic although upcoming annual stockholders’ meeting may also influence investors depending on the tone they set.
“Next week, we still see a downward bias for the local market as pandemic worries are seen to linger. The daily increase in our COVID-19 cases remains high,” said Philstocks Financial Senior Analyst Japhet Tantiangco.
He added that, “Our country’s COVID-19 vaccination campaign is clouded by uncertainties as the government struggles to obtain vaccine supplies.”
“The continuous surge in COVID-19 cases and the vaccine roll out uncertainties are weighing on our economic and corporate outlook. This in turn is seen to keep the negative sentiment in the next trading week,” said Tantiangco.
He noted that, “Trading could also remain lethargic as many investors may continue to stay on the sidelines while waiting for catalysts that could tilt the local market’s bias to the upside.”
Online brokerage firm 2TradeAsia.com said annual stockholders’ meetings may “provide better insight
for shareholders to gauge balance sheet strength in the context of challenging 2021 and, more importantly in these times, tone on upcoming dividend distributions.”
It added that, following the rise in mining stocks due to the lifting of mining moratoriums, there may be spillover momentum towards provincial plays where mining tenements are present as mine sites provide labor opportunities and LGU revenues.
“The threat of ECQ-inducing COVID spikes and escalating geopolitical tensions in the West Philippine Sea cast rain clouds over the horizon, which might pull the index lower,” said 2TradeAsia.com as it sees some silver lining.
It said “lulls may be taken as opportunities to accumulate value plays, now that vaccine deployment is finally catching fire.”
BDO Chief Market Strategist Jonathan Ravelas said “(Last) week's close at 6,494.81 signals the market could still test the 6,300 levels in the near-term. Any rally could just be limited towards the 6,700 levels.”
COL Financial is recommending a BUY for Eagle Cement despite reporting a lower profit last year, noting that the drop is lower than its estimate because of higher-than-expected revenues.
It also noted that the firm may pay higher dividends after amending its dividend policy recently to up to 100 percent of profits from the previous ceiling of 50 percent.
COL also has a BUY rating on Max’s Group as “We expect sales to sustain its recovery in 2021, albeit there are several headwinds that could potentially slow the company’s recovery.”
“We believe sales will gradually recover as consumer confidence improves, particularly after COVID-19 cases starts to flatten and the government accelerates its vaccination program,” it added.
Abacus Securities Corporation is recommending a BUY on D&L Industries especially after its stock price has fallen 10 percent from its January peak.
“DNL continues to provide value even at current prices and seems to have evaded the recent market drops,” said Abacus adding that it has also upgraded its target price for the company’s shares.
It noted that, “We believe DNL’s 2020 performance can be sustained this year, and recovery of food ingredients, which is dependent on the food service industry and vaccine rollout, will boost earnings further.” “We see that revenue and profit levels of 2021 can surpass pre-pandemic levels,” said Abacus adding that it has upgraded its long-term target price for DNL by 20 percent.