1 month ago
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Investors in the local stock market will be watching out for cues from the Bangko Sentral ng Pilipinas’ policy meeting this week.
The local market was able to bounce back last week, supported by active trading and net foreign inflows. In the process, the market was able to get past the 6,000 and 6,150 crucial lines as well as the 10-day exponential moving average.
“This past week, we also saw an appreciation of the peso against the US dollar as well as a decline in our long-term treasury yields. A continuation of this next week is expected to help the local market in advancing further,” said Philstocks Financial Research Manager Japhet Tantiangco.
He noted that investors will watch out for the monetary authority’s policy decision and outlook on Thursday, Feb. 13, and “a cut in policy rates together with a dovish outlook is expected to give the market a boost.”
Meanwhile, COL Financial Chief Equity Strategist April Tan said, “we believe that investors should take advantage of the market’s prevailing volatility to buy stocks at much cheaper prices.”
“Although the Philippines’ fourth-quarter GDP growth was disappointing, it was not surprising. This is clearly reflected in the market’s lackluster performance and depressed valuations even before the weaker-than-expected GDP growth numbers were announced,” she noted.
Tan added that “the steep drop in the market caused by the rebalancing of the PSEi index had nothing to do with stocks’ fundamentals. Historically, declines caused by index rebalancing did not last, benefiting investors who bravely went bargain hunting.”
Finally, she said that while US President Donald Trump is aggressively implementing tariffs as a negotiation tool, the Philippines is not expected to be a priority since the country’s exports account for only one percent of total US imports.
Online brokerage 2TradeAsia.com also said, “local metrics are looking steady: inflation stood at 2.9 percent in January, GDP consensus has stabilized to still above-average growth (relative to peers) despite downward revisions recently, and initial earning releases for the fourth quarter have been at least in line with expectations.”
“Post the shuffle in the PSEi and its constituents, expect trades that may be more reflective of earnings releases and gyrating headlines in the macro (seesaws Trump tariffs),” it added.
For stock picks, COL has a BUY rating on Robinsons Retail Holdings Inc. (RRHI), which it views as “a potential value play with an anticipated turnaround in earnings should private consumption recovery and wage hikes boost discretionary consumer spending.”
“RRHI’s well-diversified portfolio of retail formats in both staples and consumer discretionary should also enable it to capture a broad consumer base and weather economic cycles.
“Valuations remain deeply discounted, with the market valuing RRHI’s retail business (excluding the market value of its stake in BPI) at only 2.9 times estimated 2025 earnings,” it added.
Abacus is also upbeat on RRHI, as it expects earnings to improve by 10 percent to 15 percent this year, while management is also expected to boost the dividend by 10 percent or more to P2.20 per share.
The brokerage also has a BUY rating for GT Capital Holdings Inc. (GTCAP) because its valuation is at a historic low, and its banking unit Metrobank's net interest margin is expected to benefit from the slower pace of easing and a large cut in required reserves.
GTCAP’s stake in Metro Pacific is also seen to be enhanced by Maynilad's planned initial public offering and the contemplated merger of its tollways business, as well as the optimistic outlook for Toyota this year.
