This week, trading at the local stock market, is seen to be anemic as a lot of investors are already enjoying the holidays while wary of prospects of the global economy in 2023.

“For the last week of this year, a shortened one, we may see the local market move sideways as investors look forward to 2023,” said Philstocks Research Manager Japhet Tantiangco.

He noted that, "Investors are expected to weigh economic concerns that could still be present next year including the country’s high inflation, the monetary tightening of the Bangko Sentral ng Pilipinas and the Federal Reserve, and the possible global economic slowdown, against hopes that next year would still be a robust one for our local economy, particularly its growth, despite the aforementioned challenges.”

“As the curtains close for 2022, eyes are trained towards 2023 and the movers for the first quarter of the year,” said online brokerage firm 2TradeAsia.com.

It added that, “interest rates will remain a sensitive point of discussion, only with less juxtaposition against inflation and more in tangent with its impact on aggregate demand.”

Meanwhile, 2TradeAsia.com said “China's recent reopening is drawing more excitement to 2023. Our past notes have harped on how China's growth has pulled export and demand drivers to the downside for the fourth quarter of 2022, this is expected to somewhat reverse in the first quarter, with production quotas now being ramped up ahead of the Lunar New Year.”

The brokerage also noted that, “Spending, public and private, will be a key metric for 2023."

On the public side, “record-level budget is going to be measured against absorptive capacity, given overhangs in infra projects as well as stimulus for 'momentum' sectors such as inbound tourism and agri.”

“On the private side, the market will reward those who will be able to maintain their capex and dividend matrix, in the face of possibly lower free cash flow from higher debt service,” 2TradeAsia.com said.

With that, the brokerage said the PSEi is looking to retest 6,600 and 6,800 before year-end. At this level, price is around 13 times forward earning.

“While this supports broad optimism, there is some wisdom to picking apart the basket and aiming for the creme de la creme--the high yield, recession-resistant plays that have their multi-year growth stories intact,” it added.

For stock picks, Abacus Securities Corporation said the share prices of DMCI Holdings and Union Bank of the Philippines may get a boost as they are expected to join the 30-stock basket of the PSEi.

Fund managers usually adjust their portfolios whenever there are changes in the PSEi composition and the brokerage said that, since neither DMC and UBP are widely held, getting added to the benchmark index is like to boost share prices due to spike in demand.

Meanwhile, Abacus said index stocks are seen to report stronger earnings this year but most are because they are “coming from dismal or weaker-than-expected financial performances this year.”

“Investors should be more impressed with companies that posted better than expected numbers this year and are forecast to continue strong bottom lines in 2023. In our view, these include SM Prime, Wilcon and SM Investments,” it added.