Interest rates, window dressing to boost stocks

The local stock market will likely see more activity this week on account of the US and Philippine banking authorities’ decision to keep interest rates steady as well as due to some month’s end windowdressing.

“With little changes seen for yields on fixed income instruments, several are anticipating funds to flow back into equities, especially those that provide consistent and high dividend yields,” said online brokerage firm 2TradeAsia. com.

With steady rates, property developers will benefit as many will scout for investment opportunities such as condo units that can be leased out, affordable housing, even leasing commercial properties for franchising/store operations.

It also noted that, “those in capital-intensive industries would benefit, as infra-based projects are expedited.”

Meanwhile, 2TradeAsia. com said first quarter 2019 portfolio closing will highlight the week, which might prod liquidity positioning in select large- and mid-caps.

As the second quarter approaches, 2TradeAsia.com also advises investors to consider sector plays that would do well in May's election run, specifically those tied to consumer and investment spending.

Improved travel should also merit listed shares with tourism-related business models.

Demand-driven summer season would also boost power and energy-related stocks.

Abacus Securities Corporation is recommending a buy for LT Group after valuations for subsidiaries Asia Brewery, Tanduay and Eton were raised on better than expected 2018 earnings.

Online brokerage firm COL Financial is recommending a buy on East West Bank after its 2018 earnings beat estimates on higher-than expected noninterest income.

COL is also bullish on another lender, Philippine National Bank because “recent quarters have shown an acceleration in the bank’s core income growth. Overall, we like PNB as a turnaround play given its efforts to improve profitability coupled with revenue and cost synergies that are expected to result following its merger with Allied Bank.”

COL also likes consumer stock Max’s Group Inc. following its positive results for 2018. “We continue to believe that MAXS deserves to trade in line with its peers given its similarly attractive mediumterm outlook, its strong brand portfolio, proven track record of growing revenues, as well as the recovery of margins from a very low level in 2017,” it noted.