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Telcos, consumer stocks are most favored in 2016

Telecommunication firms and consumer-focused companies are still the most favored stocks as the local stock market enters an election year.

Nisha Alicer, head analyst at DA Market Securities, said that for the first trading week of this year, telco and consumer stocks will still be a hot buy.

“I prefer telcos for dividend play and defensive play, while consumer/retail continue to be a strong sector,” said Alicer. She said consumer sector will be largely supported by election spending, lower oil prices, and the country’s demographic dividends.

Manila Bulletin

LOCAL STOCKS STAGE STRONG RECOVERY (Reuters) – Traders cheers as the Philippine stock market rebounded on June 26, 2013, after a five-day selloff. The Philippines benchmark stock index closed 5.7 percent following overnight gains on Wall Street. The index rebounded from a five-day selloff but is still down 18 percent from its mid-May all-time peak.

AB Capital Securities’ Alexander Tiu also placed his bet on telco and media companies which both fall under one sector in the benchmark index. He said these sectors will directly benefit from the 2016 presidential elections.

Tiu added that media companies listed in the Philippine Stock Exchange (PSE) will experience a rally in the next trading days.

“Media companies listed in the stock exchange maybe a good investment especially the election is coming,” said Tiu, highlighting stocks like GMA Network, Inc. and ABS-CBN Holdings, Corp.

For his part, Justino Calaycay, analyst at the Philstocks Financial, Inc., said investors must focus on sectors that proved to be “resilient” in the face of the challenging macro-environment.

“These are sectors that generally out-performed the over-all market referencing relative (to) year-end levels between the main PSE index and the individual sector indexes,” said Calaycay.

“In the case of the Industrial and Services sectors which are both further broken down into a number of sub-sectors, and in the absence or lack of individualized indexes for the latter, we strove to develop our own based on the construction of the ‘official’ indexes. This helped define the ‘resilient’ group within each subsector,” he further explained.

For the first trading week of 2016, market participants will be anticipating the December inflation amid the lack of leads expected here and abroad.

“Players will check on December inflation, following the acceleration in consumer prices last November.  With 11-month average of 1.42 percent within government’s low-end target for the year, which is two percent to four percent, participants might see increased chances for local monetary authorities to maintain their interest rate policy, at least before the Fed’s first meeting on January 26,” Jason Escartin, Investment Analyst at the 2TradeAsia.com, said.

Escartin said that investor sentiment is likely to glide with trends overseas, in the absence of new leads within the local arena.

Most investors opted to take profits as the 2015 trading calendar finally closed on Tuesday, failing to sustain the 7,000-mark for the benchmark index this year.

The Philippine Stock Exchange index (PSEi) on Tuesday fell by 31.53 points, or 0.45 percent to close at 6,952.08, while the wider all shares went down by 5.69 points, or 0.14 percent to 3,990.47.

For the full year 2015, the index gave up 278.49 points, or a drop of 3.85 percent.

The market was closed from Wednesday until Friday last week for Rizal Day and New Year’s Day Celebration.