Stock trading is seen to be influenced further by updates on the country’s COVID numbers and progress in its vaccination program while all eyes and ears will be on the Bangko Sentral as the Monetary Board meets later this week

“As of last Friday, the local market is up by 11.29 percent from its May 24, 2021 trough of  6,156.20, making it susceptible still to profit taking,” warned Philstocks Financial Senior Supervisor for Research Japhet Tantiangco.

He noted that, “if there will be no catalyst next week, then selling pressures are expected to continue to dominate the market.”

For catalysts, Tantiangco said investors are seen to watch out for developments on the country’s vaccination campaign as further progress in vaccine procurement, and a ramp up in the number of individuals inoculated may spur positive sentiment.

“Investors may also monitor the country’s COVID-19 case counts. A slowdown in the daily increase of our cases may also help lift sentiment,” he added.

Tantiangco said that “the market is also seen to take cues from the upcoming meeting of the Monetary Board of the Bangko Sentral ng Pilipinas.”

“While the policy rate is projected to remain unchanged in the upcoming meeting, investors are seen to watch out for the BSP’s inflation expectations. A decline in expectations may also give a boost to the local market,” he said.

Online brokerage said that, “while the BSP is expected to follow suit on the Fed’s rate decision, it will be interesting how the monetary board will respond to Fed plans in the net policy meeting (June 24).”

It warned investors to “Brace for volatility, especially in banks and highly leveraged shares, should the BSP telegraph similarly hawkish messages, though at current circumstances, is unlikely.” 

Meanwhile, said “The PSEi may have eased on the gas pedal, so to speak, but the overall trend remains positive, unshaken by the Fed’s looming hawkish stance.”

“After all, local fundamentals are more critical versus global speculation; and with vaccinations ramping-up and being incentivized by public and private parties, better quarters are expected,” it said.

The firm noted that, “Fundamentals for the second half of the year are looking up, primed by the government’s move to shift Metro Manila and some areas of the NCR plus under ‘GCQ with restrictions’.”

“While this scheme only offers slight relaxations versus the plain vanilla GCQ format, note that certain types of businesses have now been allowed, including: museums, gyms, and improved provisions for outdoor tourism venues and restaurants. These are foot traffic traps —they increase overall mobility and help supply chains achieve faster turnover of goods,” explained.

It added that, “If this trend continues for the rest of NCR plus, a possible consumer spending (and by extension, GDP) upward rerating may be warranted within the next quarter, which in turn should push equity valuations higher.”

BDO Chief Market Strategist Jonathan Ravelas said “Last week’s close at 6,851.38 implies a near-term top is in place at the week’s high of 7,001.21. Continue to expect the market to range between the 6,700 to 7,000 levels in the near-term.”

“However, a sustained fall below the 6,700 levels could signal the market could retry the 6,300 to 6,500 levels and reignite the bears to play,” he added.

Abacus Securities is still recommending investors to buy shares of ICTSI even though it recently broke out to a new all-time high and is now above the brokerage’s previous target price of P150 per share.

“We have thus reviewed our outlook for the stock with a view toward upgrading our fair value,” Abacus said.

It noted that, the US economy has progressed toward a full reopening of its economy while Europe and China have picked up the pace of vaccinations and trade growth is expected to accelerate as a result.

This, plus the weakness of the US dollar are seen to be positive for ICTSI’s second quarter results.

“Meanwhile, consensus earnings per share estimates for the company have jumped 20 percent for 2021 and 25 percent for 2022. So despite rising 24 percent year-to-date, ICTSI is actually still trading a fraction below its 10-year mean forward price to earnings ratio,” noted Abacus.

Thus, the firm said “We are therefore hiking our target price for the stock to P174 which is about 22 times next year’s earnings.”

COL Financial is rating Megaworld Corporation a BUY as its planned real estate investment trust offering will unlock a significant value of the firm’s net assets.

“Megaworld will be able to raise as much as P27.3 billion from this exercise which it can use to further grow its leasing portfolio. This also implies that MEG is undervalued given that at the maximum offer price, MREIT is already equivalent to 53.3 percent of MEG’s market cap,” it added.

Source: Manila Bulletin (