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Cautious trading advised

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By James A. Loyola

Stock investors are advised to trade on the conservative side as the market continues to wait for clearer macro-economic signals as well as the announcement of corporate earnings results.

Traders work beneath a monitor and an electronic ticker at the trading floor of the Philippine Stock Exchange in Bonifacio Global City (BGC), Metro Manila.(Bloomberg file photo)

Traders work beneath a monitor and an electronic ticker at the trading floor of the Philippine Stock Exchange in Bonifacio Global City (BGC), Metro Manila.(Bloomberg file photo)

“Caution should seep in for now, with local elections coming in, especially for a market that’s in search for firmer direction on pending economic policies,” said online brokerage firm 2TradeAsia.com.

It noted that, “market gauges are likely to form a new base as 2018 results are released, especially among large-cap stocks while possibilities for monetary authorities to maintain their status quo on interest rates might gain support, pending the US Fed’s next card given the latest US retail spending data.”

“Fund managers are seen to assess variables that would support the global macro outlook this year, and how locally listed companies will position relative to their capex and operation-related strategies,” 2TradeAsia said.

Thus, the firm said “this would likely keep gauges at bay for now, as investors retool their respective trading calls, and review these on a quarterly perspective. Sectors that have already lagged behind the overall market might be attention-catchers of liquidity, specifically those angling on improved prospects beyond 2019. Continue to trade a range.”

Meanwhile, Abacus Securities is taking a look at the PSE index recomposition and expects a hike in the stock prices of both incoming Bloomberry Resorts Corporation and outgoing Petron Corporation.

While fund managers are seen to buy Bloomberry to rebalance their portfolios, Abacus noted that stocks that are taken out of the index fall initially but eventually bounce back and Petron rise will also bank on rising fuel prices.

Abacus is also recommending investors buy Holcim Philippines after its price dipped following a government order to halt operations at its Mabini plant.

“We believe the issue will be resolved and that it will not materially affect the potential sale value of HLCM. We would buy on weakness especially if it falls below P9.00. We retain our view that LafargeHolcim is motivated to sell and that any transaction would value HLCM at around P12.00 to P13.00,” it said.

For SB Equities, it is recommending a BUY on Ayala Land after the firm announced 2018 earnings that were within expectations adding that “the stock currently has 20 Buys, 0 Hold and 0 Sell with a Bloomberg consensus target price of P52.66. Our own target price is P50.”

For its part, COL Financial is reiterating its BUY rating on Robinsons Land Corporation given the positive earnings outlook.

“We believe the market has not priced in the improvements taking place as RLC is still trading at a huge 36.2 percent discount to our net asset value estimate of P35.71,” said COL Research.

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