Local stocks will be taking cues from the central bank’s policy meeting but the start of the week may see some bargain-hunting after the market pulled back last week following a rally that lasted five straight weeks.
“Trading has toned down as seen in the thinning value turnover and foreigners have turned net sellers for the past three trading days. With last week’s decline, we may see some bargain hunting this week,” said Philstocks Financial Research Manager Japhet Tantiangco.
He noted that “investors are expected to focus on the Bangko Sentral ng Pilipinas’ upcoming policy meeting. A rate cut, if delivered, may give the market a boost."
“Investors are also expected to watch out for clues on the BSP’s policy outlook. If hints of more policy easing would be given, then it is expected to spur optimism amongst investors,” he added.
Tantiangco also said that “investors may also watch out for our upcoming OFW cash remittances for clues on the local economy.”
“Key downside risks seen for the market are the movement of our currency as well as the tensions in the Middle East. A further depreciation of our currency and an escalation of tensions in the Middle East is expected to weigh on the market,” he cautioned.
Meanwhile, 2TradeAsia.com said “disinflation kicking in is taking off pressure for dramatic monetary policy action. The clearer interest rate path and less CPI stressors (rice) are seen to improve consumer confidence and credit activity, with an 'artificial' boost in early 2025 from the mid term elections.”
It also noted that “potential spoilers to short/medium-term momentum include escalating tensions in the Middle East, which is threatening to push oil price outlook outside of our comfortable range, exacerbated by a stronger greenback in the past week.”
“We have cautioned about sharp gyrations between the PSEi's current trading range as the market continues to be hypersensitive to broader market data. Range trade and take the swings in stride… Spot for entry points during these pullbacks,” it advised investors.
For stock picks, COL Financial has BUY ratings for DMCI Holdings and its subsidiary Semirara Mining and Power Corporation because of their low market prices (well-below historical valuations) and very high dividend yields.
The brokerage also has a BUY rating for MacroAsia Corporation because “we believe MAC has a solid foothold in the (aviation services) industry and is well-positioned to capitalize on emerging growth opportunities as air travel continues to recover post-pandemic.”
“Additionally, we see significant growth potential in MAC’s institutional catering business, where the company is leveraging its strengths to gain market share in this fragmented sector,” it added.