The local stock market is seen to have a downward bias as investors continue to fret over the impact of high inflation and rising interest rates although there may be a bit of bargain hunting that may be spurred by positive earnings reports.

“The local market has already been declining for four straight weeks with total losses amounting to 3.93 percent. With this, we may see some episodes of bargain hunting next week,” said Philstocks Financial Research Manager Japhet Tantiangco.

He noted though that, “Overall, the market is still seen to move with a downward bias amid resurfacing worries over aggressively hawkish monetary policy outlooks of the Bangko Sentral ng Pilipinas and the Federal Reserve.”

“Investors may continue to price in the BSP’s upwardly revised inflation outlook as well as their signal of more possible rate hikes to come. Concerns over a further tightening by the Federal Reserve is also expected to weigh on the market following the higher than expected US January inflation and strong labor market,” Tantiangco said.

Online brokerage 2TradeAsia.com said “Inflation-interest rate related gyrations should keep market anxiety up over the near-term; further, growing geopolitical tensions that could affect oil markets and lackadaisical China recovery means more bias towards being risk-off.

“On the brighter side, these pain points could be tradeable opportunities, especially for value hunters looking to hold at lower valuations. After all, emotional markets are exploitable markets,” it added.

Tantiangco noted that, “Next week, investors may also take cues from our upcoming balance of payment position data.”

“The fourth quarter 2022 earnings season remains in full swing, with index members Ayala Land Inc. and Wilcon Depot reporting next week. So far, stories have danced around corporate-level strategies against higher capital costs and ways to grow earnings per share in spite of difficult macro-events,” said 2TradeAsia.com.

For stock picks, COL Financial still has a BUY rating for Globe Telecom despite a downgrade in its earnings estimates “following GLO’s disappointing 2022 earnings results and given the company’s 2023 guidance.”

“We reduced our revenue growth forecast and cut our EBITDA margin forecast to 50 percent the next two years, in line with company guidance. We also raised our depreciation and amortization forecast to factor in the negative impact of GLO’s elevated capital expenditures the past few years,” said COL.

However, the brokerage said that, “Despite the downgrade, we are maintaining our BUY rating on GLO with an upside of 18.7 percent.”

Meanwhile, Abacus Securities Corporation said Globe’s Mynt has received BSP approval to offer its GCash platform on a beta or test basis to overseas Filipinos using international SIMs.

“Given the huge Philippine diaspora, this could be a significant value driver for Mynt and Globe. Filipinos living abroad are very likely to have Gcash balances that are well above average and they may also drive monetization for the platform.

“More than this, we see the potential for major disruption in the remittance industry as international Gcash transactions will bypass traditional money transfer providers or even banks. This could turn out to be a competitive advantage for Globe,” it added.

Aside from Globe, Abacus said Integrated Microelectronics Inc. (IMI) “could be worth watching, as it is flying under most investors' radars but has a chance to be one of the best recovery stories of 2023.”

IMI has dropped 72 percent in the last five years, making it among the worst performing in the entire market over this time but its earnings has been recovering due to a reversal of some negative factors.

“We therefore believe that the company can sustain its recovery and post positive earnings through all of 2023. This is NOT a Buy call just yet on IMI but it could definitely be a stealth stock,” it added.