Power, consumer firms also appealing
While consumer and property companies remained one of the best bets among stocks, power firms may also perform better in the next few days despite a most likely sluggish trading week.
Luis Limlingan, the managing director at Regina Capital Development Corp., said market participants should look at companies under the power, property, and consumer sectors.
“Those are the ones that will benefit from the drop in oil and inflation,” Limlingan said over the phone.
In the power sector, Limlingan highlighted certain stocks such as Energy Development Corp. and Semirara Mining and Power Corp., while he picked Robinsons Land Corp. for property.
On the consumer side, he favored Century Pacific Food, Inc. and D&L Industries Inc.
Listed companies already started reporting their first quarter financial results in the past days and although it usually drives the market, Philippine shares went down mostly in last week’s trade.
Limlingan said that while the first quarter corporate earnings could give the market a boost, Philippine Stock Exchange (PSEi) may still trade sideways since not all companies are expected to report positive results.
“[On Friday] A couple of earnings result failed to stir interest after they showed up flat or at most, narrow gains, albeit their shares appears to have performed accordingly,” Justino Calaycay, analyst at Accord Capital Equities, Corp. said, referring to Aboitiz Equity Ventures, Inc. and Aboitiz Power, which both reported flat earnings.
“The banking sector however has been coming up with impressive numbers – particularly as income shifts to its traditional lending businesses from trading gains. Gotianun family-led East West Banking Corporation posted a 32-percent increase in profits boosted by its net interest income and loans,” he added.
However, unlike Limlingan, Calaycay is a bit more optimistic about this week’s trade, stating that barring any unforeseen events, the PSEi, if investors opt to focus on the positives, should make a re-test of the 7900-mark while holding support at the 7730-mark.
“So far, the economic outlook for the Philippines has been maintained as encouragingly positive – inflation is well-anchored, interest rates are stable, GIR [Gross International Reserves] is still near its record levels – and the slow recovery in exports, mainly as external demand remains weak, has been a given in past projections,” Calaycay said.
The local stock market continued to fall amid ongoing first quarter earnings season. PSEi ended the week with 53.06-points decline, or 0.68 percent to close at 7,763.21, while the wider all shares were down by 28.11 points, or 0.62 percent to 4,487.81.