Prefer property, bank stocks amid rising inflation

With rising inflation and the recent interest rate hike aimed at reining it, stock market analysts are recommending property stocks to investors.

“For those looking for good inflation hedges, property shares are good bets, as land prices are set to benefit from improved demand and government’s infra plan,” said online brokerage firm 2TradeAsia.com.

Another online trading firm, COL Financial said it is maintaining its “buy” rating for Vista Land & Lifescapes “as its upside potential is still attractive.”

“In the short and medium term, VLL plans to expand its leasing portfolio” since this will provide recurring income to service its debt and improve its risk profile.

COL also sees VLL’s residential business to be more sustainable due to its focus on the lower-end income segment of the market.

With the interest rate hike, Abacus Securities is recommending investors to buy on weakness in the share prices of Bank of the Philippine Islands and Security Bank.

Another online trading firm, COL Financial said it has upgraded Cemex Holdings Philippines, Inc. to a “buy” rating due to growing industry demand and stabilizing average selling prices.

Noting that “challenges will be constantly present in economies gearing-up with their fiscal expansion agenda, 2TradeAsia said the PSEi’s drop from about 9,000 late January, 2018 to as low as 7,400, “is definitely bound to draw on bargain hunters quick to spot on entry windows.”

However, analysts continue to fret over the weak trading volume. Papa Securities Trader Gio Perez said that, despite the index’s positive move, the relatively low value turnover shows “how some are still waiting on the sidelines for MSCI’s (Morgan Stanley Capital International) rebalancing announcement on Monday, May 14.

“We should look forward to this more so that trading resumes on Tuesday with an election holiday on Monday,” he said.

For his part, Eagle Securities Research Head Chris Mangun said that, while “there is strong indication that the index has finally found a bottom at 7,500. My biggest concern is still the lack of trading value.”

“Most of Friday’s gains came because of the lack of sellers which allowed buyers to push prices up on very little volume. If we continue to see buying pressure next week, then we may see the index test its next resistance at 7,830,” Mangun said.