Top stocks for the week Eyes on firms’ earnings report

As the market takes a break from its positive momentum, more and more companies are now set to release its full-year 2017 earnings results, which is hoped to provide more optimism than a drag for Philippine shares.

“Earnings review begins. Banks such as Metropolitan Bank and Trust Company (with 10-percent core income growth to R18.2 billion) have published preliminary 2017 numbers, and more are bound to follow in the coming weeks,” Online brokerage 2TradeAsia.com said.

“Part of this list would be telco shares, with Globe Telecom, Inc. set to announce (earnings) on February 6,” it added.

The brokerage firm said the attention for the telco sector should zero-in on the impact of the third player’s entry and balancing pricing versus regulatory structure frequencies.

For this week, 2TradeAsia said the spotlight will also revert to the local monetary authority during their first meeting for this year following the Federal Reserve’s status quo on US interest rates.

“Given hints from officials, the peso-dollar rate is still within range and no significant spikes is seen for consumer prices. Players are pricing in for local interest rates to remain firm,” the brokerage firm said. 2TradeAsia.com is also looking at catalysts from alliance angles. “The administration’s hybrid PPP is among the catalyst we see to bring the ‘Build, Build, Build’ rollout to fruition,” it said.

The massive size of infrabased projects, it added, should reinforce alliances, specifically in financing and technical proficiency. This would make it equitable in managing risks and returns, given the long gestation period of projects. “The Philippines could entice more direct foreign investments,” 2TradeAsia said.

On Friday, the local shares managed to recover from days of losses, ending the week on positive territory. The Philippine Stock Exchange index (PSEi) settled at 8,810.75, down 230 points week on week or by 2.6 percent.

Analysts consider last week’s series of decline as “healthy breather” after days of run-up.

“After hitting 9,078 last January 29, the mart has already retraced three percent but gauges are still on an ascending long-term trend. Similar to past trends, gyrations within 8,650 to 9,000 (will) support longer upward channels. Buy gradually on weakness,” 2TradeAsia further suggested.

For this week, support is pegged at 8,750 to 8,770, while resistance is at 8,900 to 8,950.