While selling pressures remain after a 7-week rally, the local stock market is seen to remain bullish and may again try to breach the 7,000 level especially if US inflation data as well as local corporate earnings, remittances and foreign direct investments figures boost investor sentiment.

“Despite profit taking in the middle of the week, a Friday rally still allowed the local market to close last week with gains, implying that bullish sentiment remains,” said Philstocks Financial Research Manager Japhet Tantiangco.

He noted though that, “Next week, the local bourse could move sideways. With the seven-week rally, we expect profit-taking pressures to be present. Still, we expect positive sentiment towards 2023 corporate results to continue providing support to the bourse.”

“The record high performances from Wall Street, if it continues, is also expected to continue in giving off positive spillovers to the local market. Investors are also expected to watch out for upcoming data including those on OFW cash remittances and foreign direct investments for clues on the local economy,” Tantiangco added.

China Bank Capital Corporation Managing Director Juan Paolo Colet said “Our market is poised for another attempt to close above 7,000, but whether it finally succeeds in overcoming the strong resistance at that level will depend largely on the US February consumer price index print.”

“How US equity markets react to the inflation report will influence the direction of the local stock index. If we see data that bolsters bullish bets of a Federal Reserve policy rate cut in June, then our market will likely benefit from risk-on sentiment and move higher this week,” he explained.

Online brokerage 2Tradeasia.com said “The next Fed meeting is slated on Mar 19-20: brace for interim price swings in rate sensitive sectors, but expectations so far are leaning towards another non-move from the Fed.”

“Earnings season continues with more large caps to report next week (15.7 percent weighted) led by hegemons Ayala Corporation and San Miguel Corporation. Results continue to track 2Tradeasia's expectations, with the average being pulled by positive results from some property, banking, power, holdings and gaming; drags include telco and mining, which were anticipated in the back half of 2023,” it noted. 

2Tradeasia.com observed that, “The 7,000 zone has so far been elusive, with recent sessions characterized by long wicks signaling strong selling pressure up top, although Friday's technical confirmation has brought near-term technical relief. 

“This is a reminder that while rallies are not eternal (i.e. prices have to consolidate at some point), ultimately, long-term uptrends are produced, directed, and shaped by positive fundamentals and spreads between intrinsic value and price. Range trade for now,” the brokerage advised.

For stock picks, COL Financial recommends DMCI Holdings as it is trading well below its historical price-to-earnings ration and, based on its actual 2023 cash dividend of P1.44 per share, this provides a very high dividend yield of 12.5 percent.

The brokerage also has a BUY rating on Megaworld “given its robust residential segment and recovering malls and hotels. Its office segment remains a steady source of income and a strong anchor of the company’s value. Shares of MEG are attractively valued, it trading 56 percent below our fair value estimate.”

Despite lowering its earnings forecast for Security Bank following weaker-than-expected 2023 results, COL said it is maintaining its BUY rating on the stock as it expects the bank to benefit from the country’s continued economic growth. 

“The bank’s high capital ratios and liquid balance sheet will allow it to pursue opportunities to further grow its intermediation business in the medium term,” it added.

Meanwhile, Abacus Securities Corporation is advising investors to buy Aboitiz Equity Ventures following the correction in its share price “as the market continues to underprice the conglomerate’s prospects for this year.”

Aside from the contribution of its newly-acquired stake in Coca-Cola Philippines, AEV is also seen to see growth in its infrastructure segment. “We are thus more confident that AEV will again beat earnings expectations this year,” it noted.