The local stock market is seen to focus on inflation and its impact on the US and domestic interest rates while also taking note of first quarter earnings reports.
“This week, macroeconomic concerns are still expected to be present, primarily with respect to the Philippines’ inflation and interest rate outlook. These in turn are expected to weigh on the market,” said Philstocks Financial Research Manager Japhet Tantiangco.
He added that, “Investors are also expected to watch out for policy outlook clues from the Federal Reserve’s meeting next week following the latest macroeconomic data from the US wherein first quarter GDP grew below expectations but first quarter PCE (personal-consumption expenditures) inflation accelerated compared to the preceding quarter.”
Online brokerage 2Tradeasia.com said that, while the Philippine economic growth trend has been affirmed by the Philippine economic team, the International Monetary Fund, World Bank, and the Asian Development Bank, “risk assets at home remain held back by inflationary pressures that erode confidence of a rate cut.”
“Expect movements to remain glued over inflation and interest rate movers- case in point, next week's Fed meeting, while likely to be neutral, is going to be hyper-analyzed for any tonal change indicators in the second half,” it noted.
The brokerage firm also said that, “The split week ahead (markets closed for May 1st, Wednesday) may further dilute volumes, but earnings results and ASMs should help inject excitement throughout early May.”
For stock picks, Abacus Securities Corporation is advising investors to buy Aboitiz Equity Ventures as its share price has dropped due to foreign selling.
“Once foreign selling abates, we think that the stock can recover quickly. Our advice, therefore, is to take advantage and Buy the current dip,” it added.
With its core earnings in 2023 ahead of forecasts, SSI Group is on COL Financial’s Buy list.
“Despite headwinds from high inflation, we think SSI remains well-positioned to capture the rebound in discretionary spending given its core customer base in the upper-income segment and its portfolio of established and upscale brands,” the brokerage said.
While facing stiff competition from other retailers, COL still has a BUY rating on Puregold “as it remains well-positioned to capture the recovery of consumer spending despite near term inflationary headwinds.”
“Moreover, we see medium-term growth being supported by PGOLD’s continued store network expansion initiatives as it ramps up new store openings for its two retail brands,” it added.