Market to remain volatile
The local market is seen to continue being volatile as there is no certainty as to what will happen next in the US-China trade war.
“For now, markets really need to get used to this volatility, until both (US and China) realize their unique competitive advantage that complements the other,” said online brokerage firm 2TradeAsia.com.
Locally, with the mid-term elections over, Congress is seen to buckle down to work on pending economic bills and these may affect certain sectors such as property, mining, and utilities.
The market is also seen to benefit from government’s plan to reduce banks’ reserve requirement since “not all funds could be accommodated in upcoming fiscal bond or corporate note issuances.”
“These should find its way into equities, especially since the latest weakness opens opportunities to accumulate for the long term. Go for stocks with encouraging upside potentials especially in the second half,” noted 2TradeAsia. Abacus Securities is recommending East West Bank which finally had a strong quarter with first quarter profit expanding 34 percent. “We remain a buy on
the stock because it is too cheap to ignore,” it noted.
It is also bullish on LT Group after the firm’s tobacco delivered strong results on higher volumes and a favorable sales mix. “It is one of the cheapest conglomerates despite having one of the fastest growth rates,” Abacus said.
Abacus also likes Cebu Air because “the stock is cheap and could benefit from AirAsia PH's plan to do an IPO later this year.”
Online brokerage COL Financial is recommending a buy on SSI Group after raising its estimated fair value by 18.7 percent to 14.00 per share because of better earnings visibility amid an acceleration in same store sales growth.
COL said it also has a BUY rating on Filinvest Land because, at the current price of 11.58, “FLI is trading at a steep 48.7 percent discount to our fair value estimate of 13.08. We like FLI for the continued expansion of its investment properties which improves the company’s defensiveness.”
BDO Chief Market Strategist Jonathan Ravelas said “the market’s close at 17,583.82 (last week) signals there is still some room for further decline towards the 7,000-7,300 levels in the nearterm. Any bounce is limited to the 7,800 levels.”