The local stock market is approaching a week where it may finally take a pause from its winning momentum and succumb to a correction, with property and consumer companies as “best stocks” to monitor and invest in.
Alexander Tiu, senior equity analyst at AB Capital Securities, Inc., said in a phone interview that companies in the consumer and property sectors will still be the top performers in the medium-term.
“These are the companies whose revenues are mostly locally generated and they are more resilient to what’s happening outside or in other countries. For property, we prefer those that are connected to retail and BPO (business process outsourcing),” Tiu said.
A recent data from the Philippine Stock Exchange(PSE) showed that some of the property sectors that have been seeing consistent increase in their share prices are Ayala Land, Inc., SM Prime Holdings, Inc., Megaworld Corp., and Robinsons Land Corp.
Meanwhile, consumer stock Universal Robina Corp. is one of the most actively traded stocks on Friday that registered gains.
Moving forward, Tiu said the market may still continue its positive momentum but a correction looms as Philippine shares start becoming overbought again.
“There’s still a bit of upside in PSEi (Philipine Stock Exchange index) but there might be a chance of weakness since we’ve been going up for several days now and our RSI (relative strength index) is reaching overbought level,” he said.
This week, Tiu said market participants will watch out for the United States’ core retail sales. “This should give an idea if the US economy has truly recovered.” On the local front, Overseas Filipino Workers (OFW) remittances data is being anticipated.
“A technical breather won’t come as a surprise, given the previous week’s rally. Data drivers for sentiment might be inclined towards China’s trade data and US inflation,” F. Yap Securities analyst Jason Escartin said.
On Friday, the local market beat a one-day correction by rebounding.
PSEi ended the week with an increase of 32.12 points, or 0.45 percent to close at 7,138.91, while the wider all shares gained 16.35 points, or 0.40 percent to 4,079.75.
“Headlines of possible delay in the Federal Reserve rate supported a surge in equities, lifting the PSEi 288 points up at 7,138 or 4.21 percent week-on-week,” Escartin said