Special Report: 8 Stocks to Buy Amid Higher Inflation, Lower GDP

PinoyInvestor’s Special Reports cover our partner brokers’ expert analysis on a range of topics affecting the stock market. These may include economic updates, sector analyses, upcoming IPOs, and more! Learn how you can use this report in the PinoyInvestor guide.

 

Our Partner Broker’s Recommendation

Overall, concerns on the Philippines’ macro-economic drivers as well as the downward bias on GDP growth will continue to weigh in on the equities market in the near term. We retain our view though that these are just short-term pains as we rebalance our economy towards more sustainable sources, evidenced by the strong capital formation in the past quarters. The move by the BSP to address inflation should also be taken positively. The ongoing transition should not deter investors from buying this market.

We recommend taking any weakness as an opportunity to accumulate on quality stocks expected to benefit when concerns on inflation eases. Our eight (8) top picks are:

 

Summary of Recommendations and Target Prices:

1. SMPH (Buy, Target Price: PHP 38.50)

2. ???

3. ???

4. ???

5. ???

6. ???

7. ???

8. ???

 

Our Partner Broker’s Detailed Analysis

PH’s Short-term Pains

The Philippines’ 2nd Quarter (2Q) 2018 GDP growth ended at 6.0%, a disappointment from the 6.6% median estimates. Robust growth reported in investment and government spending was dragged by lackluster foreign trade performance as well as slower household consumption. We believe that the 2nd half of the year will reflect the same story: inflation eating on consumer pockets, widening trade deficit, yet GDP will be supported by sustained public spending and capital formation.

 

BSP Changes its Tone

Despite the slower 2Q 2018 GDP growth, the BSP heed the call to hike policy rates by 50 basis points last week. Gov. Espenilla said that the strong move was needed to anchor inflation expectations and rein in impact of secondary effects (e.g. wage, fare and water tariff hikes, and higher tobacco taxes).

Some economists have adjusted their GDP forecasts to 6.3% – 6.4%, from 6.7% this year. This means that the 2nd Half 2018 GDP will be at the 6.3% – 6.5% range.

We reiterate our view that …

 

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.