Stock-Market Outlook

Last week

Share prices rose last week, with the main index closing at the 7,000-point level, on favorable inflation outlook and promising corporate earnings.

The benchmark Philippine Stock Exchange index (PSEi) gained 105.08 points to close at 7,056.62 points.

The main index was up for only two days, but it was enough to allow the trading week to end in the green.

Average daily trading for the week was high at P7.15 billion, with foreign investors cornering 41 percent of the trades and were net buyers at P4.53 billion.

Sub-indices posted gains, with the exception of the Industrial index that fell 57.37 points to close at 9,916.19 points. The broader All Shares index rose 45.24 to 3,682.86, the Financials index gained 20.72 to 1,812.06, the Holding Firms index climbed 135.30 to 6,842.79, the Property index increased 70.86 to 3,123.64, the Services index was up 48 to 1,775.05 and the Mining and Oil index surged 281.09 to 11,818.90.

For the week, gainers edged losers 146 to 83 and 25 shares were unchanged.

Top gainers were Premiere Horizon Alliance Corp., Discovery World Corp., Imperial Resources Inc., Figaro Coffee Group Inc., Millennium Global Holdings Inc., Cemex Holdings Philippines Inc. and SOCResources, Inc.

Top losers, meanwhile, were Berjaya Philippines Inc., Anchor Land Holdings Inc., MJC Investments Corp., Macay Holdings Inc., Primex Corp., Asiabest Group International Inc. and Dizon Copper-Silver Mines Inc.

This week

Share prices may continue its upward trend this week, but analysts said volatility could run high in the trading on speculations in the run up to the United States Federal Reserve’s first policy meeting during January 31 to February 1.

Broker 2TradeAsia said expectations on the US Federal Reserve’s messaging will gyrate over the data releases prior to its meeting.

“Only time will tell with full certainty whether the recent rally (of the PSEi) back to 7,000-point level has legs or not. The more important question is whether there are catalysts that can be exhausted in the medium-term to fund a jump towards 7,500,” it said.

Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financials Inc., said the main index may continue to test the 7,000 to 7,100 resistance range.

“For catalysts, investors may look towards our upcoming fourth quarter, full year 2022 GDP data. Strong GDP figures may raise expectations that full year 2022 corporate earnings will also be robust, which in turn may help the market get past its current resistance range,” Tantiangco said.

He said, however, that the recent hawkish signals from the Federal Reserve despite the moderation in the US’ inflation may weigh on sentiment.

The local market’s 10-day exponential moving average is seen as its immediate support followed by the 6,800 level, he said.

Stock picks

Maybank Securities Philippines Inc. gave a buy rating on the stock of Bloomberry Resorts Corp. as its share price is traded at a 57 percent discount compared with its gambling peers in Macau.

Based on its income for the nine months of 2022, Bloomberry outperformed its Macau peers when it posts faster gross gaming revenue growth, it said.

“BLOOM’s share price performance is highly correlated to the performance of Macau and regional gaming stocks. With the projected reopening of China boosting sentiment on Macau gaming stocks, BLOOM has high potential to re-rate, particularly given its superior GGR growth,” it said.

It placed a target price on Bloomberry at P11.30. Its shares closed at P9.09 apiece on Friday.

The broker also maintained its buy rating on GT Capital Holdings Inc. (GTCAP), as  automotive sales of its unit Toyota Motors Philippines has outperformed the industry’s growth in 2022, despite elevated oil prices, record high inflation rates, rising interest rates and a weak peso against the US dollar.

“We think this sets GTCAP up for an even stronger 2023, during which inflation, oil prices and the Philippine peso are all expected to stabilize. Trading at a wide 51 percent discount, GTCAP is one of our 2023 top picks as it provides strong exposure to autos and overall mobility,” it said.

It gave a target price on the stock at P870 per share. Its shares, meanwhile, closed last week at P495.80.