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Stocks to take cues from COVID-19 cases

By James A. Loyola

While the local stock market enjoyed a surge in share prices last Friday on optimism over the easing of quarantine restrictions, its performance this week will depend on whether or not COVID-19 cases would spike.

“Sustaining the optimism, however, would depend on the developments of our situation with respect to the disease spread,” said Philstocks Financial Senior Analyst Japhet Tantiangco.

He added that, this week, “The number of new coronavirus cases in the country would be monitored to see if the downgrading of restrictions has brought an unwanted consequence namely, a further spread of the virus. If so, the local market could fall below the 5,700 level again.”

Tantiangco also noted that, “The rising US-China tensions amid the latter’s approval of the national security bill for Hong Kong is also expected to put downward pressure on the market.”

While the local bourse had a good run last Friday, online brokerage firm 2Tradeasia said “eyes are set on the PSEi’s ability to move towards 6,000-5,500.”

“Note overall, that volatility remains in place as sentiment remains hyped-up with several countries’ gradual transition in reviving business activity,” it added. Without naming specific stocks, 2Tradeasia said investors should look at retailers as these “should get the boost from sale of basic necessities, especially for shelves that provide medical needs.”

“Also, banks are seen to benefit from other fee-based revenue sources, especially on payment facilitation. Telcos will benefit from improved data demand, video-streaming services, and also for payment facilitation,” it said.

Meanwhile, Abacus Securities Corporation pointed out that LT Group has become a high yield stock after it declared regular and special cash dividends totaling 43 centavos.

“This may not seem much but it offers a gross yield of 5.8 percent which is comparable to (PLDT’s) 6.1 percent and better than (Meralco or Globe Telecom’s),” it noted.


Source: Manila Bulletin (https://business.mb.com.ph/2020/05/31/stocks-to-take-cues-from-covid-19-cases/)

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