Eyes on COVID, stock deals – Manila Bulletin
The local stock market will continue to be influenced by news showing whether COVID-19 cases are still on the rise or ultimately on the decline, as some investors may raise funds for the next initial public real estate investment trust offerings.
“Next week, the local market could take inspiration from our COVID-19 situation. We are still seeing an upward trend in COVID-19 cases, ”said Japhet Tantiangco, Philstocks Financial’s senior research supervisor.
He noted that “if this trend continues, the local stock market could go down as a further worsening of our COVID-19 situation increases the risk that the more stringent quarantine measure will be implemented again in parts of the country.”
Meanwhile, Tantiangco said that a significant and sustained slowdown in cases could spark positive sentiment as it increases the possibility of our economy reopening again.
“In light of the August lockdowns, the impact of which will likely continue through September due to still rising COVID cases, managing expectations over the next few quarters will be key to navigating the equity market primarily cyclical, “said 2TradeAsia.com
He added that “This could mean a drop in GDP for the third quarter before resuming a more sustained pace in the fourth quarter.”
“With the end of the ‘ghost month’ and fundraising activities (REIT issues, preferred stocks and SRO announcements) vying for market attention, it would be wise to monitor volume flows and prepare for intraday volatility, ”2TradeAsia.com advised.
COL Financial and Abacus Securities Corporation both have buy ratings for the eastern West Bank despite the 19% drop in second-quarter profits.
“We maintain our PURCHASE rating on EW… mainly on attractive valuations,” said COL, although he noted that “we remain cautious about EW’s significant exposure to credit cards and auto loans. , which represent a total of 50% of its loan portfolio. “
Abacus said that, despite the decline in EW earnings, “looking under the hood keeps us optimistic as NPLs remain in control despite the ECQ, and net profit excluding trading gains has increased by 37%.”
COL also favors Max’s Group even though it faces several short-term headwinds such as high unemployment and the re-taxation of the ECQ in August.
“We are encouraged by the improved vaccination rollout in the Philippines. We believe this will be essential to allow the government to ease restrictions once the rise in COVID-19 cases is brought under control. It will also boost consumer confidence, allowing sales and margins to resume their recovery, ”he explained.
Abacus also likes First Gen Corporation, which plans to increase its attributable capacity at a compound annual growth rate of 8.3% through 2027, with zero exposure to coal.
“We therefore remain a Buy on the stock, because its offshore LNG terminal by the third quarter of next year should ensure the long-term viability of its gas plants,” he added.
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