Metro Manila (CNN Philippines, August 31) — The numbers are in.
Twenty-one out of the 30 most actively traded companies, comprising the Philippine Stock Exchange Index (PSEi) posted positive net income growth in the first half.
Holding firm LT Group led the advances, with a net income of ₱4.5 billion, or 97% higher from the same period in 2017. Stellar corporate earnings were also delivered by: First Gen Corporation (₱5.9 billion, up 35%), San Miguel Corporation (₱35.5 billion, up 29%), Puregold (₱3.1 billion, up 25%), Globe Telecom (₱9.8 billion, up 21%), and DMCI (₱9.2 billion, up 21%).
On the other hand, some failed to meet market expectations. PLDT was the worst performer in the first semester. It’s net income declined to ₱11.8 billion, or 29% lower than the same period last year. Other decliners include Universal Robina (₱4.9 billion, down 23%), JG Summit Holdings (₱12.3 billion, down 23%), Security Bank (₱4.3 billion, down 18%), and Bank of the Philippine Islands (₱11 billion, down 6%).
As the second half pans out, CNN Philippines asked some analysts which stocks should investors look out for. https://twitter.com/cnnphilippines/status/1035448109919174656
In a report, COL Financial identified property, telco, cement, and consumer as the best performing sectors in the first half. Meanwhile, it tagged banks and power as the poor performers.
Luis Limlingan, managing director at Regina Capital said investors should put their money in stocks related to banks, property, and consumer for the last quarter. He explained, the banking sector’s dismal first half earnings offer investors wider room to buy shares.
He also noted, gaming-related stocks are the wild card in trading. This is brought about by the influx of tourists and investors, betting on the country’s leisure and entertainment sector.
“We like Bloom, I think more for traders. It’s rather volatile. If you don’t like something volatile, go for either SM or AC depending on the price. For property, we like SM Prime. For banking, we like BPI, also depending on price. This is based on how it is doing right now. Well finally, I think for your consumer stock, depending on your entry point, we like Jollibee if you can get it to ₱270 or better, Puregold if ₱46 or lower,” Limlingan said.
Despite the hype on the Duterte administration’s “Build, Build, Build” program, Limlingan is not as bullish on construction-related stocks, given the slow rollout of infrastructure projects. But, he sees cement companies as possible game changers in the construction industry.
“We prefer Eagle (Cement) actually. It’s a low-cost alternative, good quality. They are opening another plant, I think, in Bulacan. So that would be a good bet for us. It has a more competitive advantage than the foreign players. At least Eagle (Cement) is a local player and is at par in terms of quality, with other international brands,” he explained.
Meanwhile, for BDO Capitals’s President Ed Francisco, investors looking at the long-term should consider buying shares in holding firms SM, DMCI, and Metro Pacific Investments. He also urged investors to bet on property firm Ayala Land, as well as BDO, Metrobank, and Robinson’s Retail.
Following a generally positive corporate performance in the first half, analysts are expecting an uptrend, that could lead stocks to rally.
For his part, Aniceto Pangan, trader at Diversified Securities said, more investors may come in if the government’s infrastructure program will yield results.
However, they are not discounting risks that may weigh on local stocks. These include higher consumer prices, depreciating peso, rising global oil prices, and the ongoing trade dispute among the world’s biggest economies.