The week may start with some bargain hunting following the PSEi’s plunge last Friday after hitting overbought levels, but the November inflation report on Tuesday will determine the stock market’s direction in the following days.

Online brokerage 2TradeAsia.com said “The Fed's shift in tone towards ‘slowing down’ its aggressive hawkish stance on policy rates caused a ripple of optimism across capital markets.” However, local equities fell as market players opted to take profits ahead of a shorter trading week (Dec. 8 is a holiday).

“November inflation data will be an interesting discussion point for (this) week, to gauge the BSP's move in its final policy meeting of the year (Dec. 15),” 2TradeAsia.com said.

It noted though that, “No breach is seen north of 8 percent (from Oct.'s 7.7 percent) which is realistic given a calmer dollar rate, no big movement on crude oil, and absent major agriculture related supply shock.” With shorter trading weeks are coming ahead, 2TradeAsia.com said there is an opportunity for the market to consolidate over the Christmas season.

“Finding the correct play for 2023 is going to be the crux of most trades in the next few weeks--monitor for possible spikes in volume as funds find rationality over this wall of worry,” it advised.

For its stock picks, Abacus Securities Corporation cross-referenced the forecast earnings for 2023 with the share price movement of each company this quarter and and found a number of potentially mispriced stocks.

It cited Aboitiz Power Corporation which “has the highest improvement in consensus earnings per share (EPS) but it is actually underperforming the index by more than 10 percentage points (when it should be outperforming).”

“Wilcon is even worse. It has the third best increase in EPS forecasts next year but has a negative 5.5 percent return this quarter. The stock was marked up on close at the end of September but we still believe it is mispriced,” the brokerage said.

It added that, “Another case in point is RRHI. The retailer is lagging the rally with a mere 5 percent gain this quarter despite having the fourth best hike in 2023 EPS estimates.”

Abacus also advises those looking for yield plays to accumulate Semirara Mining and Power Corporation shares because its expects SCC to distribute at least P2.00 per share worth of cash dividends by April next year based on its earnings estimate of P44 billion.”

“This is achievable because earnings for the first nine months is already at 81 percent of projections for 2022,” it noted.

Meanwhile, COL Financial said “We are reiterating our BUY rating on GTCAP as the concerns on Toyota Motor Philippines’ (TMP) margins have started to abate with the recent rebound of the peso.”

“Note that the peso has strengthened by 4.2 percent from a high of P59.08 per dollar to P56.70 a dollar. This, coupled with TMP’s price hikes and reduced promotions should lead to better margins going forward,” COL explained.

Meanwhile, it pointed out that, “Federal Land’s joint ventures with Nomura and SM Prime help support the long-term earnings prospects of the group. We believe that any weakness arising from the deletion of GTCAP from the MSCI index should be viewed as an opportunity to accumulate the stock.”