Conglomerates, banks are hot buys before year ends.
By Madelaine B. Miraflor
Conglomerates and banking firms would be the ideal stocks to buy in this shortened trading week, while local bourse is expected to host more active trading sessions a few days before the year ends.
To pave way for the holiday, the market will only be trading for three days this week. The session will start on Wednesday and will go on another break until January 2, 2018.
Marita Limlingan, president of Regina Capital Development Corp., said that window dressing is expected to take place in the market this week so more trading can be expected.
Window dressing is a strategy that takes place either the end of the quarter or before the year ends. It is usually used by brokers or fund managers to improve the appearance of a fund's performance before reporting to their clients or shareholders.
When asked what sectors would be ideal in the next three days, Limlingan said "conglomerates as proxies to the economy and some banking stocks."
Listed conglomerates that were rated "buy" by online brokerage firm COL Financial Group are GT Capital Holdings, Inc. and ATN Holdings.
As for banks, COL Financial gave a 'buy' recommendation to the stocks of Bank of the Philippine Islands and Security Bank Corp., while Metropolitan Bank and Trust Company had a "hold" recommendation.
Brokerage firm 2TradeAsia.com said that with foreign fund managers on holiday mode, local participants might dominate the year's remaining three-day trading session, focusing mostly on second and third tier shares.
"Any weakness in select large-caps stocks would be a good window for players to move in, especially those with good stories to unfold next year," 2TradeAsia said.
"Spot for good entry windows by seizing on weakness to position in shares that provide dividend play and promising capital appreciation," it added.
For this week, immediate support is pegged at 8,370 to 8,400, while resistance is at 8,500 to 8,570.
On Friday, local shares managed to end in the green side before pausing for the holiday break.
The Philippine Stock Exchange index (PSEi) inched up by 0.65 percent, or 54.03 points to 8,432.31, while the wider all shares earned 0.59 percent, or 28.61 points to 4,921.41.