The local stock market is expected to see more bargain-hunting this week even as investors wait for the result of the Bangko Sentral’s policy meeting for more cues.
“The local market bounced back in the latter part of this past week after testing the 6,400 line. This shows that the said line still remains as a strong support,” said Philstocks Financial Research Manager Japhet Tantiangco.
He noted that, “Given that the local market remains at attractive levels, we may still see bargain hunting next week that can help the market extend its gains.”
However, Tantiangco said “The Bangko Sentral ng Pilipinas’ policy meeting next week is expected to take center stage with investors hoping that the benchmark interest rates will be kept unchanged.”
He explained that, “If the policy rates are unchanged, it may help the market advance further.”
China Bank Capital Managing Director Juan Paolo Colet said also expects “selective bargain hunting to continue this week as investors turn their focus on the BSP’s policy rate decision and outlook.”
“The consensus is that the Monetary Board will keep interest rates steady, so all eyes and ears will be on the BSP’s interest rate guidance given the Federal Reserve’s more hawkish stance. Investors will also be on standby for any announcement on Malacañang’s choice of next BSP Governor,” he added.
Online brokerage firm 2Tradeasia.com said the BSP's next move on rates will likely just be on step with the US Federal Reserve which eased of hiking benchmarket rates.
“While policy moves from the Fed take a backseat to local macroeconomic considerations in terms of influencing central banking direction, we maintain that fundamentals have strengthened in the medium-term (inflation stabilizing, job market strong) to believe that rates are less likely to experience another aggressive round of hikes for the remainder of the vear,” it noted.
The brokerage advised investors to accumulate stocks as “The index's base-building around 6,500 reinforces lack of strong impetus in the medium-term, but provides opportunities to position quietly for the long-term.”
Abacus Securities Corporation said “The PSEi is down 0.9percent year-to-date with lower than average volume and listless trading. Everyone seems to be in wait-and-see mode but our advice is to resist the urge to stay in the safety of the herd and start accumulating.”
“This is especially important for institutional investors who may not be able to buy what or as much as they want to when the market does start to gain traction,” it added.
Abacus said “We prefer large caps trading (SM, ICT, BDO) and consumer names (RRHI, PGOLD, URC, DNL) that are trading well below their historical valuations. Companies with strong earnings growth (BLOOM, MWC) and some REITS with little or no office exposure (CREIT, RCR) should also have a place in clients’ portfolios.”
Meanwhile, COL Financial has a BUY rating for PLDT (TEL) as it noted that Voyager, which owns digital bank Maya, is planning to raise $150 million and this may boost valuations.
“Recall that Voyager was previously valued at $1.4 billion when it raised $210 million in April 2022, which brought TEL’s 36.63 percent stake to an implied valuation of P28.2 billion,”
Abacus is also recommending ACEN after its share price dropped following announcement of a plan to issue P25 million worth of preferred shares which may mean earnings to common shareholders will be diluted by around P1.8 billion which is about 13 percent of next year’s earnings.
“However, this may be an opportunity once the price stabilizes. Second half earnings are expected to be significantly better and this is likely to carry over to 2024. Buy on dips,” the brokerage said.