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Easing trade tension to boost PH stocks


By James A. Loyola

The local stock market is seen to start the week on solid footing, following three straight weeks of gains by US markets as the US and China swap good will gestures to ease tensions in their ongoing trade war.

US stocks were buoyed by news that China will exempt US pork and soybeans from its next round of tariffs after planned tariff increase on Chinese goods were delayed by the American President.

However, BDO Chief Market Strategist Jonathan Ravelas noted that local market participants had stayed on the sidelines last week ahead of the US Fed meeting scheduled on September 19.

Ravelas said that, last week’s close at 7,992.32 “continues to signal the market to consolidate within the 7,700 to 8,000 levels in the near-term.”
Amid this cautiousness though, investors are seen to continue picking up select second liners and stocks with strong growth stories.

Online brokerage COL Financial is recommending a buy on Cebu Air shares due to an upgrade in its fair value estimate for the stock after the firm beat earnings estimates for the first half of the year.

Earnings estimate for Cebu Air had been boosted partly by the expected increase in its cargo revenues due to the growing logistics business in the country.

Meanwhile, even though they have yet to recommend a buy for DMCI Holdings, both COL and Abacus Securities Corporation are keeping watch on the company after upgrading their earnings estimates for the company.

Abacus said DMCI subsidiary Semirara Mining and Power Corporation is to improve its earnings this year and post a stronger turnaround next year due to higher coal production and power output.

DMCI Homes is also seen to get a boost from project launches this semester while Maynilad earnings could rise until 2021 due to staggered rate hikes.
Abacus also points to an improvement in prospects for DMCI Mining due to an expected hike in nickel prices while COL noted that the Mines and Geosciences Bureau has already recommended the lifting of the suspension of mining operations of DMCI’s Zambales unit.

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