The local stock market is seen to be swayed by corporate earnings reports, the government’s decision on whether to ease quarantine restrictions, as well as lingering concern over US interest rates.
“Next week, we expect the local market to take cues from the government’s decision on the alert levels to be implemented in the country by February 1,” said Philstocks Financial Senior Supervisor for Research Japhet Tantiangco.
He noted that, “So far, signs of improvement have been seen in the COVID-19 situation of the country, primarily in the National Capital Region. If this leads to the easing of restrictions, then it is expected to give market sentiment a boost.”
“Concerns over the monetary tightening in the US this year may continue to weigh on the market, however, especially as the Federal Reserve has already given hawkish signals in their recent policy meeting,” Tantiangco said.
While the Bangko Sentral ng Pilipinas previously said rate hikes are unlikely for the first half of 2022, which the recent inflation trend supported and affirmed, 2TradeAsia.com warned that, “there is no discounting the pressure the Fed can impose on regional central banks especially if rate hikes come sooner than expected or the balance sheet unwinding is larger than previously telegraphed.”
Meanwhile, Tantiangco said “the market may also take cues from the upcoming IHS Markit Philippines Manufacturing PMI and Inflation data for the month of January.”
“Investor attention will also be glued to next week's earnings releases, with BPI (Bank of the Philippine Islands) due to announce2021 results (this) week to be followed by Globe the week after,” said 2TradeAsia.com.
It noted that, “these Ayala firms are hegemons of their respective industries and are likely to set the tone for their sectors.”
As was the trend for most of 2021, 2TradeAsia.com said “there is still carryover low base effect from 2020 skewing results plus higher odds for one-off gains backloaded to fourth quarter {e.g. tax related gains).”
The brokerage pointed out though “forward looking guidance particularly in capex and dividends are more valuable, as sentiment gyrates between growth and value once again, given the current market backdrop of volatile rates.”
“The Fed’s tightening plus polarized election season only highlights the importance of hedging with assets that are resilient against external headwinds,” 2TradeAsia.com advised.
Abacus Securities Corporation noted that Emperador has rallied to a new all-time high of P22.80 and close at P22.30 per share last Friday on its possible inclusion in the main PSE index.
“Punters may therefore want to accumulate before the results of the index review are announced and should be ready to sell on news,” it advised.
The brokerage noted that, “The last time that EMP was added to the index, the stock jumped more than 20 percent over several days (August 10-14, 2020).
Abacus also likes Figaro Coffee Group as its Angel’s Pizza is “the best-selling brand on GrabFood’s platform, has a long runway for growth, has high margins at an affordable price point and will aggressively push expansion over the next few years.”
“Our view is that the odds favor the stock doing well especially with its restaurant peers feeling the pinch from the pandemic and squeezed margins,” it said.
The brokerage also noted the opening of AllDay’s 35th branch and that it remains on track to reaching long-term goals.
“We remain bullish on the company’s growth along with the synergies in the Villar group,” Abacus said.