“This bullish sentiment is supported by the country’s sound fundamentals. The BSP’s [ Bangko Sentral ng Pilipinas] rate cut pushed properties higher and allowed the sub-index to recover from last year’s slump,” AB Capital Securities Inc. said in its weekly report. It added that financial stocks have also benefited from lower interest rates.
Local news was also dominated late week on reported talks between Philippine Airlines and a possible investment by San Miguel Corp. PAL Holdings Inc., which controls about 84 percent of the flag carrier rose 1.29 percent to P7.85 each on Friday.
US stocks were mixed on Friday as the US reported that consumer confidence increase while the housing market dipped short of expectations. The Dow Jones Industrial Average dropped 0.01 percent to 12,982.95 while the Nasdaq and S&P 500 added 0.23 percent and 0.17 percent, respectively.
This week: AB Capital said the PSEI is well above its 5-year average in terms of valuations despite its expectations for a correction. . It said the recent rally values the PSEI at around 17 times earnings versus its average of about 13 times.
“While we have assessed that a correction is warranted as most issues are already overbought, the appetite of the market seems unabated,” it said in its outlook report.
“At current overbought levels, we recommend to look into companies that may gain an advantage over such geopolitical conditions and government projects,” AB Capital added.
Stocks to watch: The stock brokerage firm is keeping its buy recommendation for Aboitiz Power Corp. (AP), which is up 14.2 percent week-on-week.
“Other than an expected power supply shortage in the next years, the current risk of oil price spike makes renewable energy sources cheaper in the spot market. AP’s renewable energy is 43 percent of its total attributable capacity,” AB Capital said.
AB Capital also favors cement companies as these would benefit from the launch of big-ticket infrastructure projects that the government would bid out for 2012.
PSEi stock Recommendation week feb 27 - march 2 2012
The Philippine Stock Exchange Index (PSEi) has set another all time high level yet again when it reached 4997 but it pulled back far from that level when the index closed the week at 4893.The moving averages have now been set up in the bullish setting and for the moment, they confirm the uptrend that we are experiencing. The MACD lines have momentarily gone sideways but are still considered to be bullish as it continues to stay above the zero line.
Should the index correct from this point, we expect the support to be at 4700, where the resistance of the trading range is set. Should it fall further, then we expect the 50MA to serve as the next support at 4625. However, with the bull market still in place, we don’t expect the index to fall too much.
Recommendation: Hold
Support: 4700
Source :
http://www.absolutetraders.com
http://businessmirror.com.ph
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