Market to look overseas for cues

The local stock market will look for cues from overseas such as Turkey and the US-China trade war while investors will continue to look for bargains after digesting recently-released second quarter earnings.

“With only four trading days next week, we are expecting to see lower volume. However, local investors may treat this as a buying opportunity as several blue-chips have pulled back last week,” said Eagle Equities Head of Research Chris Mangun.

“If this happens, then we may see the index go sideways or even gain a little. The index is currently down only 1 percent for the month of August. Retail investors are going to continue to look for more opportunities in second-liners as the main index is still in limbo.”

For its part, 2TradeAsia. com pointed out that, “there are several companies trading at a discount to their cashflow potential, and it would only take a matter of time, once these firms are noticed, once the dust settles in.”

Among firms that have encouraging second quarter results is Semirara Mining and Power Corporation which merited a BUY recommendation from both Abacus Securities and COL Financial.

“Fundamentally, we like SCC since we expect it to be a major beneficiary of the country’s rising power demand,” said COL adding that “the outlook for its coal mining business has improved due to its higher production level.”

Meanwhile, COL rated First Philippine Holdings Corporation as a BUY while Abacus Securities preferred its subsidiary First Gen Corporation. Abacus is also recommending a BUY on Alliance Global, Inc.

“Next week would be a make or break situation for the PSEi. Support is still at 7,530 but if it can’t hold this line, then we may see it come all the way down to 7,360,” said Mangun.