COVID Delta variant to increase inventory – Manila Bulletin
The local stock market appears to be weighed down by concerns over local transmission of the more infectious Delta variant of the SARS-COV2 coronavirus and fears of a further rise in new cases. . .
âConcerns over the detection of COVID-19 cases with a locally transmitted Delta variant could persist in this week’s trading,â said Japhet Tantiangco, Philstocks Financial’s senior research supervisor.
He noted that “the local transmission of the Delta variant, known to be more infectious, raises fears of an increase in COVID-19 cases, the re-application of strict quarantine measures and, possibly, a delay in the economic recovery. “
Online brokerage 2TradeAsia.com said that with the Delta variant now in the country, “market participants may face yet another wave of pessimism in the coming weeks, investigating how this will affect the policy of public health”.
He warned investors to “prepare for volatility in all asset classes, especially those linked to the country’s history of macroeconomic recovery.”
Tantiangco said that “another factor that can negatively affect the market is the weakening of the peso, as it discourages foreign investors from placing their funds in the local market.”
âIf the peso continues to decline next week, we may see more foreign outflows from the market. In light of these elements, investors should remain cautious, âhe added.
Tantiangco added, âAt the same time, investors should always pay attention to the upcoming second business results. Given that, we could still see lukewarm trading next week. “
According to 2TradeAsia.com, “positive double-digit growth rates are to be expected, mainly on the base effects of the strict implementation of the April-June 2020 foreclosure.”
âUnfortunately, we expect investors to look beyond the impressive second quarter numbers in favor of the third quarter forecast in the context of the Delta variant,â he added, noting that âalthough the tone does be not as gloomy as in 2020, re-downside odds are likely to be coming.
With these, 2TradeAsia.com said “there is little incentive for the psyche to break through the 7,000 mark, at least for now”; . However, where others give up hope, those who have been in stocks for so long know that times of panic tend to pay off the most. Hedge the bets, but note the valuable stocks worth picking up. “
BDO Chief Market Strategist Jonathan Ravelas said last week’s close at 6,693.83 âhighlights that the bears are under control. This signals further testing towards the 6,300-6,500 levels in the near term. “
For stock purchases, COL Financial recommends Robinsons Retail Holdings Inc., noting that its share price has fallen 15% year-to-date, severely underperforming the PSEI.
âThe company is also still trading 22% below its pre-pandemic price, despite good prospects for a recovery. We believe this is not warranted given that RRHI is on the verge of a full recovery at above levels before the pandemic next year based on our forecasts, âhe added.
COL said: âOver the medium to long term, RRHI remains well positioned to capitalize on retail growth opportunities through its diverse portfolio of store formats. In addition, the growing trends in e-commerce bode well for the company as it focuses more on strengthening its online presence. “
Abacus Securities Corporation also recommends RRHI due to the shrinking of its brand portfolio, particularly in fashion and the addition of its pet store business which has short and long term potential.
He added that Google mobility data shows Filipinos now spend more time in retail and leisure establishments than at any time during the pandemic.
Abacus said he believes RRHI could outperform over the next 12 months and see a rise of more than 20% for the title.
The brokerage house also favors MacroAsia Corporation even though it is one of the worst performing stocks since the start of the pandemic.
âThe divergence between MAC and CEB is striking despite the fact that their fortunes are essentially linked. This is partly due to the problems with PAL; in particular, the deposit reported in Chapter 11, âhe noted.
But, Abacus explained that “the bankruptcy is only related to creditors in the United States (especially aircraft lessors) and will not affect operations.”
âNonetheless, the share price remains closer to its pandemic low than its all-time high and this, in our view, represents an opportunity for investors. Our view is that catering, ground support and aircraft maintenance will all have largely recovered by the end of next year, âhe added.
So Abacus said, ââ¦ Long-term investors may therefore want to buy when there is a dip and build positions slowly. “
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