FREE Market Commentary: PSEi Drops Below 8,000 Points

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Market Issue or Event

PSEi, US Stocks Drop on Trade War Tension

Last Friday, the S&P 500 and Dow Jones indices of the United States fell by more than 2% last night as Trump ordered to levy tariffs on at least $50 Billion in Chinese imports. In retaliation, China said they plan a $3 Billion import tariff on the US, including pork imports (25%), and steel pipes, fruits and wine (+15%). Japan’s Abe is also looking to meet with Trump due to the latter’s move to levy tariff on steel and aluminum, which could also shake the relationship of both countries.

 

Our Partner Broker’s View and Commentary

The PSEi’s bounce last week was hampered due to fears of escalating trade war between US and China. The shortened trading week this coming week could make investors stay on the sidelines as political risks grow.

We reiterate that at this point, any rally should be viewed as an opportunity to sell / take profits, and just start initiating new positions when the selling pressure eases. If any, valuations should become more reasonable as the correction deepens.

We are looking to selectively accumulate at the PSEi buying window of 7,700 – 7,800 points. Our priority buys in the index, in order of preference are:

BDO (Buy, Target Price: PHP 165.00)

SMPH (Buy, Target Price: PHP 43.00)

SM (Consensus Target Price: PHP 1,020.00)

SECB (Buy, Target Price: PHP 270.00)

RRHI (Buy, Target Price: PHP 112.00)

MBT (Buy, Target Price: PHP 100.00)

ALI (Consensus Target Price: PHP 51.00)

Outside the index, we like the following stocks: EW (Buy, Target Price: PHP 35.00), WLCON (Buy, Target Price: PHP 12.70), and PIZZA (Consensus Target Price: PHP 17.00).

 

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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.