The local market is forecasted to remain volatile throughout the week as analysts caution investors and traders on oil price pressures and tightening monetary policy.
China Bank Capital Corporation Managing Director Juan Paolo Colet said the “increasing US Treasury yields and the volatile Israel-Hamas conflict have dampened risk sentiment as investors wrestle with tight monetary policy, upward oil price pressure, and geopolitical tension.”
“Market participants will also closely watch key data releases this week, including US third quarter GDP and US September core personal consumption expenditures price index, which could influence the policy rate stance of the Federal Reserve,” he added.
Online brokerage firm 2TradeAsia told investors and traders to “expect more protracted ‘real world’ impacts over the next few weeks, including possible oil price shocks, supply disruption from clogged Eurasian ports among others.”
Hence, it advised investors to “stick to ‘reliables’ amid heavy uncertainty on the ground, and have enough liquidity for when the smoke clears.”
Abacus Securities Corporation noted the advantage of EastWest Bank Corp. as having a large proportion of consumer loans to their total loan books compared to other major listed banks.
Abacus cited the bank’s CEO as saying “their loan growth has been tracking better than industry, with the bank expecting to post P6.5 billion in net income this year, which is over 40 percent year-on-year growth.”
“The stock has risen over 17 percent since last note last September, EW is still trading at extremely cheap valuations, with a P/ABV at still at only 0.37x. Although the stock has lost liquidity in recent years, the earnings recovery may increase investor interest and bring the stock closer to its long-term mean P/ABV,” it said.
Another entity it highlighted was Philippine holding firm Bloomberry whose "stock is already undervalued at current levels," citing its "decline by 6.4 percent in the past five trading days."
However, Abacus said Bloomberry "still offers a potential upside of around 45 percent at current prices, and still warrants a strong buy," noting "Okada's third quarter numbers that are encouraging to Bloomberry, especially coming into the fourth quarter" and the recent "share issuance by Quasar equivalent to 559 million shares and adjustment of its target price lower to P14.60 from P15.40."