Holding firms to continue positive trend

Major holding firms that are listed in the Philippine Stock Exchange (PSE) may continue to trade positively, with support coming from the remaining optimism brought about by the Federal Reserve’s move to delay the interest rate hike.

This week’s top stock picks include conglomerate giants Ayala Corp., GT Capital Holdings, Inc., and SM Investment Corp., Regina Capital Development Corp. (RCDC) managing director Luis Limlingan said in a text message.

He said the basis for the picks was based on "purely technicals" or on the performance of these stocks in the past days.

Other holding firms that were given special mention in a certain market review are San Miguel Corp. (SMC) and Alliance Global Group, Inc. (AGI).

In its weekly stock market data, BPI Asset Management highlighted SMC’s declaration of cash dividends of 0.35 per share last week, which will be payable on November 4, 2015 to shareholders on record as of October 9, 2015.

It also mentioned AGI’s plan to allot capital spending of close to 80 billion this year, which will all be funded using internally-generated cash.

“AGI President Kingson U. Sian announced capital spending of 65 billion for Megaworld Corp., 3 billion for Emperador, Inc., 8 billion for Travellers International Hotel Group, Inc., and 2.7 billion for Golden Arches Development Corp.,” BPI Asset said.

Last week, the local equities market rallied following market expectation and the occurrence of a delay in the US rate hike given the lower-than-expected US August inflation print and continued indications of global economic weakness.

F. Yap Securities investment analyst Jason Escartin said that in the next trades, optimism may buoy the market after the US Federal Reserve voted to delay its long-awaited interest rate liftoff, citing recent global and financial developments that could ‘restrain economic activity’

“With the Fed keeping rates, it would not come as a surprise should the local central bank [Bangko Sentral ng Pilipinas] follow suit. However, officials previously said they will try to maintain parity between stateside and local rates. Aside from the Fed’s indication on its rate liftoff, the local central bank will also consider other factors in its monetary board meeting this week,” Escartin added.

Limlingan, for his part, said the market should hold above 7,110 this week in order to keep the bullish setup intact and rally towards 7,272-resistance.

“Otherwise, it is very likely that the index will suffer from corrections to 6,860 (max). Also, we are have to cautious of index volatility as weekly range expanded from 76 to 95 points, indicating sharper intraday moves. A cautious position is still raised this week, especially since some issues have already recovered above their long-term moving averages,” Limlingan said.

“On the other hand, we recommend taking profits on trading positions or sell those which are now trading near resistance,” he added.