FREE Market Commentary: Stocks Affected by the Continued Peso Depreciation

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Market Issue or Event

Stocks that are Affected by the Continued Peso Depreciation

Following the BSP’s move to cut the reserve requirement rate (RRR) by 100 basis points, the peso closed at a low of PHP 52.34. Reducing the reserve requirement is expected to flood the system with more peso, thus resulting to it being less valuable. The RRR cut will be effective on March 2.

 

Our Partner Broker’s View and Commentary

We expect the peso to continue weakening at least within the first half of 2018 due to BSP’s loose monetary policy and as trade gap continues to widen.

We think the consumer Food & Beverage sector (JFC, PIZZA, CNPF, DNL, MAXS) will be the most affected by a weak local currency, especially those on the discretionary side, as margins will continue to be challenged due to higher raw material costs and tighter competition.

Thus, we advise investors to shift to the sturdier Consumer Retail sector like:

PGOLD (Target Price: PHP 58.00)

RRHI (Buy, Target Price: PHP 109.00)

WLCON (Buy, Target Price: PHP 12.70)

Peso weakness will also be positive for Exporters like NIKL (Target Price: PHP 7.30), IMI (Not rated), TECH (Not rated), SSP (Not rated), and ION (Not rated).

 

This report is prepared by PinoyInvestor’s partner broker below. Sign up to this stock broker to avail of their complete trading brokerage services:

AP Securities (formerly Angping & Associates Securities)
AP Securities (formerly Angping & Associates Securities)

AP Securities (formerly Angping & Associates Securities) is one of PinoyInvestor’s partners in delivering superior and reliable stock research reports that help Filipino investors make smart stock investing decisions! Learn more about them here.