Manila Bulletin

Stocks to be range bound

- By JAMES A. LOY­OLA Business · Finance · Stocks & Markets · Investing · Financial Markets · Asia Brewery · LT Group · Heineken

The lo­cal stock mar­ket is seen range trade this week al­though pos­i­tive cor­po­rate nine-month re­sults have the po­ten­tial to spur the in­dex to breach the 6,000 level.

“The mar­ket may be more in­clined to trade within range for now, un­til af­ter US elec­tions are nal­ized by Novem­ber. This, plus in­di­ca­tors that COVID-19 will re­main a ma­jor con­cern by at least the rst half of 2021 partly ex­plain the 26day con­sec­u­tive net for­eign sell­ing to to­tal $2-bil­lion year-to-date,” said on­line bro­ker­age 2TradeA­

It also noted that, “Fur­ther pres­sures in­clude the timely pas­sage of the 2021 gen­eral ap­pro­pri­a­tions bill, and while Congress was able to set­tle the lead­er­ship dif­fer­ence, mar­ket par­tic­i­pants are of­ten wary of change-of-hands in pol­i­tics.”

Phil­stocks Fi­nan­cial Se­nior An­a­lyst Japhet Tan­tiangco said though that,

rst nine months of third quar­ter earn­ings re­ports by listed com­pa­nies may be a ma­jor cat­a­lyst to boost the mar­ket above 6,000.

“Based on the move­ment of the PSEi and in­vestors sen­ti­ment, bulls are some­how in con­trol of the mar­ket since the PSEi has been sup­ported at the 5,700 level,” he noted.

He added that, the rec­om­men­da­tion to ease of quar­an­tine re­stric­tions from GCQ to MGCQ may also boost sen­ti­ment.

On the down­side though,

Tan­tiangco said the re­cently con­clu­sion of the Con­verge IPO may “af­fect or suck liq­uid­ity from the mar­ket. In­di­vid­ual mar­ket news could also af­fect stocks since the gen­eral mar­ket sen­ti­ment is un­cer­tain.”

Thus, 2TradeA­ said that, “for those in­vested in equities, the safest bet would be hold­ing on to safe rafters — such as div­i­dend stocks and de­fen­sive con­glom­er­ates.”

“With 2022 as the 'sweet spot’ for fun­da­men­tals-where COVID-19 is ex­pected to no longer be a driv­ing force in the equa­tion plus be­ing an elec­tion year — for the mean­time, the in­terim should he spent ac­knowl­edg­ing div­i­dend and value plays,” it added.

With the lack of mar­ket mov­ing news the whole of last week, analaysts have few leads for rec­om­mend­ing stock buys.

How­ever, Aba­cus Se­cu­ri­ties Cor­po­ra­tion is strength­en­ing its BUY rec­om­men­da­tion for LT Group which dis­closed that its bev­er­age unit Asia Brew­ery has agreed to up­grade its joint ven­ture with Heineken from purely dis­tri­bu­tion of Heineken and Tiger brands to in­clude brew­ing these pre­mium prod­ucts.

“This is pos­i­tive for LTG be­cause pro­duc­ing the prod­ucts re­al­izes higher mar­gins than dis­tri­bu­tion alone. We thus ex­pect a more mean­ing­ful con­tri­bu­tion of this seg­ment to the Group be­gin­ning next year,” said Aba­cus.

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