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Wednesday, November 22, 2017

Weaker peso buoys consumer stocks

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By Madelaine B. Miraflor

Shares of listed consumer firms will be ideal to take hold of in the local stock market as holiday spending is seen to increase, with many Filipino families also benefiting from higher remittances.

“With fresh succession in the Federal Reserve about to start February next year, following President Donald Trump’s appointment for Jerome Powell’s stewardship, markets are absorbing the greenback’s continued strength, given indications on the timing of tighter monetary policy regime this December,” Online brokerage 2TradeAsia.com said.

“This would likely prompt Asian currencies such as the Philippine peso, to stay within weaker territory for now, until adjustment in the widely followed Fed benchmark rate comes to its culmination,” it further explained.

As a result, the brokerage firm now sees the weak peso shoring up export receipts as well as overseas Filipino workers (OFWs) remittances just in time for the Yuletide season.

Inflation is likewise expected to pick up to 3.6 percent from September’s 3.4 percent, which could keep some consumer stocks ideal to buy.

“Our full-year average of 3.3 percent to 3.4 percent remains within consensus and should keep interest buoyant among consumer spending-sensitive stocks like Puregold Price Club, Inc., Robinsons Retail Holdings, Inc., and SM Investments Corp. or SM Prime Holdings, Inc.,” 2TradeAsia said.

It also advised market participants to watch out for stocks that are set to release their financial earnings for the first nine months of the year.

“Several listed firms are slated to announce their nine-month earnings results this week, representing almost 27 percent of market capitalization. These may be used as possible proxies, based on the sectors they represent,” it added.

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