06 Oct 2022 / by AP Securities (formerly Angping & Associates Securities)
PinoyInvestor’s “Market Views and Commentaries” highlight our partner brokers’ analysis and opinion on a range of stock market issues and events. Be ahead of other investors by reading these reports to understand how our partner stockbrokers view important issues and how these events impact the stock market.
Our Partner Broker’s View and Commentary
In the U.S., bond yields continue to drop and the U.S. dollar weakens further. We note that the U.S. 2-year treasury has fallen from its multi-year high of 4.3% to 4.0% while the dollar index spot (DXY) plunged by more than 4% from its high of 114.8 last September 1. Consecutive release of weaker economic data, specifically the lower-than-expected US Purchasing Managers Index (PMI) and higher-than-expected drop in job openings, have prompted the markets to dial down their expectations for Fed rates as slower economic activity could indicate that inflation could slow down.
In addition to this, the surprising pivot of both UK and Australia’s central banks from a Fed-like hawkish stance following the quantitative easing of the former and dovish notes of the latter could stir some hopes that the Fed may also step back from its aggressive rate hikes. These all led to the positive tone in the US market that we saw in recent days which should trickle down to Philippine stocks. However, we think this could only bring forth a short-term/temporary recovery for the PSEi as US inflation is still the primary concern (due out Oct. 13) for the market and the Fed.
We, therefore, would not jump hastily to an accumulation strategy but stay on range-trading with immediate support and resistance levels at 5,700 and 6,200, respectively.
For investors/traders who are willing to enter the market at current prices, our advice is to focus on companies that are resilient against weaker peso and benefiting from reopening and with yield plays, such as:
- BDO (Target Price: P159.00)
- SECB (Target Price: P140.00)
- BPI (Target Price: P111.00)
- MBT (Target Price: 62.00)
- BLOOM (Target Price: P9.43)
- DNL (Target Price: P10.30)
- CNVRG (Target Price: P35.00)
- CEB (Target Price: P55.50)
- DMC (Target Price: P12.50)
- SCC (Target Price: P44.00)
However, we note that for CNVRG, looming deletion from MSCI is likely to cast a heavy pall on the stock. Bottom fishing could also be attractive at the moment given that the positive sentiment abroad is likely to lift the overall market.
OTHER MARKET VIEWS
See all the most recent Market Views and Commentaries.
OTHER SPECIAL REPORTS
See all recent Special Reports.
This report is prepared by PinoyInvestor’s partner broker below. Sign up to this stock broker to avail of their complete trading brokerage services:
AP Securities (formerly Angping & Associates Securities)
AP Securities (formerly Angping & Associates Securities) is one of PinoyInvestor’s partners in delivering superior and reliable stock research reports that help Filipino investors make smart stock investing decisions! Learn more about them here.