Amid confusing macro-economic data here and abroad, the local stock market is seen to trade cautiously as investors wait for more clarity from the Bangko Sentral meeting and release of remittance data later this week.

“Next week, cautiousness is expected to prevail in the local market as investors await the Bangko Sentral ng Pilipinas’ policy decision on February 16,” said Philstocks Financial Research Manager Japhet Tantiangco.

He noted that, “The possibility of a 50 basis point rate hike is expected to be priced in, following the Philippines’ strong January inflation data. This in turn could weigh on the local bourse.”

Aside from this, Tantiangco said investors may also look towards our upcoming overseas foreign worker remittances data for clues on the local economy.

“Strong US jobs data made reading into the future of capital costs generally more complicated; January jobs added was at a staggering 517-thousand, from December's 260-thousand,” said online brokerage firm 2TradeAsia.com.

It noted that, “While this shows economic resiliency amid mass layoffs in tech, the increase fuels inflation concerns in the medium-term, which in turn, feeds into the Fed not pivoting as early as is projected by consensus.”

“We maintain our view that a healthy mindset heading into 2023 is comprised of embracing higher capital costs and adjusting portfolio selection around corporates that can grow their asset base in spite of these headwinds,” the brokerage said.

It added that, “Case in point, PH January inflation of 8.7 percent is pushing anxiety buttons, which will make the BSP's policy meeting all the more interesting. The bottom line is with the macro picture unsteady in the short/medium term, there should be a realization that the norm moving forward includes hurdle rates and risk premiums not seen in decades.”

“Over a few weeks of grappling with macro drivers, particularly following inflation and interest rate movements, markets are looking to find direction from earnings reports for the fourth quarter,” 2TradeAsia.com said.

It noted that, “While results have so far been in line with 2TradeAsia expectations, participants should brace for further volatility in the coming weeks as the broader market catches up to what is likely to be tempered outlook for 2023, at least on the dividend and capex side.”

For stock picks, Abacus Securities Corporation believes there is significant upside left for Bloomberry because of a recovery in its earnings boosted by higher tourism arrivals and the opening of new casinos.

“Despite the crackdown on Chinese junkets, Solaire’s recovery last year was much quicker than we expected,” it noted adding that, the company posted third quarter 2022 earnings of P1.54 billion against a backdrop of a tourism sector that was just beginning to recover.

This year, the government is targeting 4.8 million tourists and this may be helped by the lifting of China’s zero Covid policy.

“Although we don’t think that the junket business can be fully replaced, we are confident that a more vibrant tourism sector will benefit gaming firms,” said Abacus which noted that Solaire North is expected to be operational by the fourth quarter and management projects it to be earnings accretive by next year.

Abacus also likes LT Group as “There is still value in buying one of the cheapest stocks among all stocks in the PSE, especially the company still netting at least P20.0 billion annually.”

“We continue to prefer to hold LTG particularly for those who are looking for high yielding stocks,” it added.