Selective buying amid cautious trading seen

After weeks of selling the market, investors are now awash with cash and ready to plow these back into select stocks once they get over their uneasiness.

Top online brokerage firm COL Financial is recommending a buy of Bloomberry Resorts Corporation as its plan to buy more land is seen as a positive development for the long term.

COL is also rated GMA Network a buy “due to its effective cost management” and because it is relatively cheap compared to its regional peers.

Meanwhile, Abacus Securities has rated Phinma Energy Corporation a buy after it announced plans to enter the fuel supply business as a buffer to rising fuel supply risks.

However, market analysts note that short-term investors continue to be held back by uncertainties while those parking their funds for the long term are taking their time and waiting for prices to settle down.

“In the meantime, small to mid-cap companies will continue to be more profitable for retail investors,” said Eagle Equities Head of Research Chris Mangun.

On the other hand, online brokerage firm 2TradeAsia.com said that, “for risk-averse players, select stocks whose business model is anchored on solid recurring income prospects that can sustain dividend yields. Go for ‘character stocks’ that can glide with the peaks and troughs of an infra-led growth.”

Mangun noted that, last week, “the index barely held the trading range between 7,900 – 8,000. Nonetheless, the fact that it held that range signals a beacon of hope that the market may find a bottom at these levels.”

This week, Mangun said “I think we will continue to consolidate within this range. The other scenario is we break below it and test support at 7,700. I still think the market will find a bottom in the next few weeks. The key to the deal is Volume. We need to see a pick-up in volume if we are going to see this market recover.”

BDO Chief Market Strategist Jonathan Ravelas said investors remain on the sidelines as they await for new developments in economy that would shift the risk off mood highlighted by rising inflation and interest rates.

“Chartwise, the week’s close at 7,8999.98 still signals further weakness towards the 7,500/7,800 levels. Any pullback, if any, might be limited to the 8,100/8,300 levels,” he said.