Local stock market bulls will be looking at the start of the earnings season for more steam to continue its run after hitting a wall at the 7,400 to 7,500 as the weakening of the Peso together with offshore uncertainties weigh on sentiment.
“With the local market still deemed to be attractive, we may see bargain-hunting next week. The dovish monetary policy outlook of the Bangko Sentral ng Pilipinas is still expected to give the market support,” said Philstocks Financial Research Manager Japhet Tantiangco.
He noted though that, “More catalysts could be needed for the market to get past the 7,400 - 7,500 range. In line with this, investors are expected to look forward to the corporate sector’s third quarter reports. Upbeat corporate results are seen as one of the possible catalysts that could drive the market higher.”
“Investors are also expected to monitor the movement of the local currency.
“An appreciation is expected to help in next week’s trading while a further depreciation is seen to weigh on the bourse,” Tantiangco added.
Online brokerage 2TradeAsia.com said “The final earnings season of the calendar year officially kicks off, with the banks opening with very good numbers, as expected of sectors with interest rate-sensitive topline drivers.”
It added that, “Release of corporate guidance, both in earnings and capital expenditures, heading into 2025, is also expected to stir up additional excitement in the short-term.”
“This earnings season, on top of providing hints to the level of capital spending next year, will coincide with the release of liquidity after the BSP's most recent RRR cut.
“As the PSEi attempts to base-build around 7,500, anticipate short-run profit taking amidst a potential influx of volume right around November. Take advantage of dips to spot entries,” the stock brokerage advised.
For stock picks, Abacus Securities Corporation is advising its clients to accumulate Bloomberry Resorts Corporation after it has fallen in recent months, noting that “We believe third quarter earnings will be reflective of a turnaround story that will be proven in 2025.”
It added that the share price is now the cheapest in the region for gaming stocks even though it has better than average projected growth for next year despite current weakness in revenues from the VIP market.
Meanwhile, COL Financial has a BUY rating for Jollibee Foods Corporation after increasing its revenue and profit forecasts for the company for 2024 and 2025 mainly to account for newly-acquired Compose Coffee’s expected contribution and the more favorable outlook on JFC’s international operations.
COL increased its revenue forecasts for Jollibee by 1.2 percent for 2024 and 2.4 percent for 2025 net income estimates were raised by 4.4 percent for 2024 and 6.8 percent for 2025.
The brokerage also has a BUY rating for China Banking Corporation as it stands to benefit from the rate cut and the RRR cut.
“Furthermore, we have seen a notable improvement in the stock’s liquidity,” said COL adding that, “we expect short-term buying pressure from its potential inclusion to the PSE index during the benchmark’s rebalancing next February.
This presents a short-term trading opportunity as being added to the PSEi would attract inflows from index-tracking funds, which could further propel the share price.”