The fate of the stock market this week is seen to hinge on whether or not the growth of new COVID-19 cases in the country is arrested and if the imposition of strict quarantine measures will be extended further.

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“Investors are expected to take cues from our COVID-19 situation as well as on the quarantine measures to be implemented in the NCR Plus after April 11, as these are currently seen to be the main weighing factors on market sentiment,” said Philstocks Financial Senior Research Supervisor Japhet Tantiangco.

He explained that, “If the elevated numbers are sustained, then it is seen to tilt the market’s bias to the downside. If we see a significant drop in the figures however, then we may see a positive reaction from the local bourse.”

Tantiangco noted that, “Investors are also expected to watch out for the government’s decision on the National Capital Region Plus’ quarantine measures after April 11.”

He pointed out that, “Currently, the said area’s productive capacity is being greatly restrained by the enhanced community quarantine which is the tightest form of restriction in the country.

Maintaining this quarantine measure may result in a decline for the market. Easing of the restriction meanwhile, may give the market an upward boost.”

Online brokerage firm is assuming that the current quarantine level will last for 30 days and believes this will bring down economic growth to 5.1 percent for 2021 from the initial estimate of 7 percent and may even bring down growth in 2022.

“The last NCR-MECG in August managed to bring the reproduction factor of COVID from 1.7 to 1 in 28 days; fingers are crossed for a similar outcome in April but, until then, brace for sideways trading.

The brokerage advises investors to monitor new cases to see if the tide turns favorably, such as when new cases fall below 5,000.

BDO Chief Market Strategist Jonathan Ravelas said “The low value turnover of the market reflects investors’ lack of conviction as the recent COVID-19 situation remains uncertain.”

He expects “the market could still test the 6,300 levels in the near-term. Any rally could just be limited towards the 6,700 levels.” 

Abacus Securities Corporation is looking at the possibility of an upgrade in the target price for AllHome Corporation after its 2020 results “handily exceeded expectations and were better compared to its only domestic peer.”

“We still have to look more closely at the results but there may be scope for us to materially lift our target price,” it said.

Philstocks also has a BUY rating for AllHome noting that, despite the lockdown, “hardware stores remain open so some or all stores of HOME are still operating unlike last year” thus revenues will not take a significant hit. 

Abacus has a BUY rating for International Container Terminal Services Inc. as latest estimates show that global trade felt by a less than expected 5 percent last year despite the pandemic and growth this year is projected to be at around 8 percent as vaccinations continue to roll out globally.

“ICTSI’s geographical diversity should help it benefit strongly from the rebound in global trade,” the brokerage said.  

Meanwhile, both Abacus and COL Financial favor Filinvest Land because its planned real estate investment trust offering will boost the value of the company’s assets.

“The proposed listing of its REIT confirms our view that FLI is currently undervalued. Even at 15 percent discount to the maximum price of P8.30, the market cap of FLIRT will still be 28 percent higher than FLI’s current market cap,” COL said.

Source: Manila Bulletin (