Several banking, energy, property stocks rated ‘buy’

While the local stock market may be heading towards an upward trend, COL Financial Group, Inc. said investors must stick to value and focus on those that are still trading at attractive valuations as there is a stronger likelihood that these stocks would be bought up.

According to the listed brokerage company, some stocks with a fundamental “buy” rating that are still trading at reasonable valuations include some banking stocks namely East West Banking Corporation (EW) and Metropolitan Bank & Trust Co. (MBT).

It also gave the stocks of Semirara Mining and Power Corporation (SCC), Energy Development Corp. (EDC), First Gen Corp. (FGEN), Manila Electric Co. (MER) a buy recommendation.

For COL Financial, firms involved in real estate development like Ayala Land, Inc. (ALI), Megaworld Corp. (MEG), Vista Land & Lifescapes, Inc. (VLL), and Bloomberry Resorts Corporation (BLOOM) are also ideal to buy.

"The PSEi (Philippine Stock Exchange index) has rallied 4.2 percent since we last came out with our COLing the Shots repot. The strength of the market’s rally surprised us given the absence of positive macro developments," COL said.

"The main reason for the market’s recovery is the return of foreign funds. Note that after being net sellers since the middle of January, foreigners have turned into net buyers the last few trading days. One possible reason for the return of foreign funds to the Philippines is the PSEi’s poor performance relative to other emerging markets during the year to date period," it added.

COL added that fund managers might also be increasing their portfolio allocation to stocks in general as they are heavily underweight in terms of their exposure in the stock market globally.

"This would benefit all markets including the Philippines as rising tides lift all boats," it further said.

The market has been on paused since Thursday (April 13) in the observance of Holy Week.

Last week, share prices managed to keep its head aloft 7,600 despite the shortened three-day trading week, with attention on the Philippine’s growth story.

"World Bank (WB) took on an upbeat note on the nation’s strong macro framework, with GDP (gross domestic product) outlook at 6.9 percent for 2017," online brokerage firm 2TradeAsia.com said.

The PSEi closed 46 points higher at 7,629, up 0.61 percent week-on-week, with all sectors on the green side.

Moving forward, 2TradeAsia said while investors will still take cue from geopolitical tensions rippling across markets, the local stock market is also poised to move upward.

"Post-Easter rallies run high, especially after our local bourse has shown signs of resurgence following its breakout from its sideways trend since January. Funds have shifted back to Philippine shores, backed by international agencies’ encouraging outlook on the economy’s fundamentals," 2TradeAsia said.