Trading volume to test local market rally

Despite the market's rise last week, investors are advised to stay cautious as underwhelming trading participation and value turnover continue to test the local market's potential to sustain its rally this week. 

Philstocks Financial Research Manager Japhet Tantiangco noted, "the local market had a good run last week, supported primarily by the slowdown in the US’ October inflation and the anticipated pause in the BSP’s monetary tightening, resulting in the market moving past its "10-day, 20-day, and 50-day exponential moving averages."

"Looking at the wider picture however (year-to-date chart), the market is still on a downtrend and value turnover has remained tepid, implying that the past run still lacked conviction. Given such, investors are advised to remain careful," he explained. 

He added that the market "remains at bargain levels." 

However, Tantiangco noted that the local market may get a boost this week if the local currency remains strong against the US Dollar along with decreasing oil prices in the global market. 

Meanwhile, online brokerage firm said that economic indicators  are stabilizing with optimism signalled by lower inflation rates in the US, and status quo interest rates set by the BSP. 

However, it stressed that market volume needs to increase for the market to improve its gains, noting the incoming low trading days during the December holidays. 

Despite this, the firm said investors can still find opportunities within the lulls "to lock in bargains, amid funds' window dressing and portfolio reallocation ahead of the New Year." 

Investors and traders are advised to "strategize and gradually position for 2024." 

Abacus Securities Corporation and COL Financial recommended a "buy" rating for the stocks of GT Capital Holdings, Inc. (GTCAP). 

Abacus cited GTCAP's strong earnings performance for 2023 especially the high sales recorded by Toyota in the third quarter, but noted that it "continues to trade very cheaply." 

Even then, Abacus believes "the downside is limited and the value proposition remains compelling." 

COL Financial said GTCAP has an "attractive portfolio of assets," noting Toyota's margins recovery and Metrobank's growing net interest income." 

Moreover, COL Financial is also recommending the purchase of ACEN Corporation's stocks given the "rapid growth of its power generation portfolio and its focus on renewable energy."