Since politicians have already filed their certificates of candidacies, although there may be some substitutions before November 15, investors are now expected to refocus on the COVID situation and wait to see of the government will ease restrictions further.
“This week, investors are expected to watch out for the government’s decision on the social restriction measures of the country after October 15,” said Philstocks Financial Senior Supervisor for Research Japhet Tantiangco.
He added that, “Easing of the restrictions primarily in the National Capital Region may send the local market higher. Till the government’s decision, the market may take cues from our daily COVID-19 cases.”
Tantiangco said that, if the downward trend continues, “it may spur optimism in the market since it strengthens the possibility of restrictions being eased.”
Online brokerage firm 2TradeAsia.com noted that, “while the situation on the ground remains too tight for comfort, down-trending caseloads beginning late September should help the overall outlook for the fourth quarter rankings and help push forward valuations to at least not fall below current rungs (at 18 times forward price-to-earnings ratio).”
Meanwhile, Tantiangco noted that, “Global oil prices which remain elevated are seen to pose downside risk to the market. If the high oil prices are sustained, worse, if they rally further, then it could raise inflation worries which, in turn, could weigh on the local bourse.”
Aside from these, investors may also watch out for our upcoming July foreign direct investment numbers, and August foreign trade and OFW remittance data for clues on how the economy has been faring.
Meanwhile, 2TradeAsia.com said that, “With COC filings out of the way, the market has to contend with election predictions in the upcoming 6 to 7 months leading to the May 2022 elections.”
While there may be higher volatility for equity markets, 2TradeAsia.com noted that, “The near-term impact will be on the materially higher election-related spending that is usually frontloaded, supporting our outlook for a much better economic showing in the fourth quarter year-on-year.”
It added that, although “The 7,000 mark remains within striking distance, and elusive as it may seem, some technical setup may be seen forming sometime in the fourth quarter—granted, near-term catalysts such as 9-month earnings and holiday inflation allow it.”
It warned that investors should “brace for volatility and possible market-on-close calls in the coming weeks as 2021 nears its curtain call and the official race to 2022 begins.”
Amid all these, COL Financial is recommending a BUY for PLDT because of an upgrade in its fair value estimate for the telecommunications firm “after rolling over our estimates to 2022 and revising our earnings estimates upward on PayMaya.”
“However, note that the complete business of PayMaya is not yet fully priced in our FV estimate, so there is still potential upside (potential),” it added.
It noted that, “Despite the share price rising by almost 35 percent in the past month, we are still maintaining our BUY rating on the company because of the strong growth in its core business and potential upside risk in PayMaya.”
COL Financial has recommended D&L Industries also after “upgrading our estimates to factor in the upcoming plant expansion. We raised our revenue forecast by 3.0 percent, 7.3 percent, and 13.9 percent for 2022, 2023, and 2024, respectively. We also raised our gross margin assumption by 40 bps, 100 bps, and 150 bps during the same period.”
“We expect DNL to start benefitting from its capacity expansion by 2023 and we raise our earnings forecast by 6.9 percent for 2023 and by 18.7 percent for 2024. We now expect DNL’s earnings to grow by a 3-year compounded annual growth rate of 19.7 percent from previously 12.3 percent,” it added.
Meanwhile, Abacus Securities Corporation is recommending a BUY for retailers Puregold Price Club and AllDay Marts.
“Puregold’s outlook remains favorable with the economy reopening and upcoming elections season that should sustain their earnings performance... We also recommend subscribing to the AllDay IPO given its high growth prospects,” Abacus noted.
It explained that, “With the economy slowly opening up that should increase disposable income, PGOLD management believes this will also be beneficial for both its Puregold and S&R brands.”
Meanwhile, “The upcoming elections season and its increased spending should be positive for consumer companies, especially supermarkets, as the campaigns would boost economic activities in most parts of the country.”
For these same reasons, it is also recommending AllDay, adding that the firm has higher growth expectations relative to the juggernauts like Puregold.