Investors will have to wait until next year to see a recovery from the coronavirus (COVID-19) pandemic in the main stock index to 7,000, casting doubt on the sustainability of the recent market turnaround.
This is according to April Lee-Tan, head of research at the country’s leading online stock brokerage, COL Financial, who said that now will be the time for investors. It aims to concentrate on sectors that are resilient to COVID19. For instance, important retailers, food manufacturers, telecoms, and utilities.
There may also be an opportunity to pick up selected stocks from sectors that are vulnerable to COVID-19. For instance, non-discretionary retailers, restaurants, property, and banks for those who are willing to take a long-term view.
It would have been difficult to purchase such inventories at cheap valuations in the past bull markets. “But thy size is small. It’s not the time to be offensive at this stage, “Lee-Tan said Friday night in a press conference.
PSEi Could Soon See Another Pullback Process
COL Chief Technical Officer Juan Barredo said: “We are still in a bearish pattern. You need to take your time in accumulating. Try to be more focused on looking for opportunities in the short term. Don’t chase up rates. Aim for situations with stronger patterns.
Barredo said the PSEi could soon see another pullback process. In addition, it would give investors a better chance of accumulating local equity.
“If we are lucky, that’s going to be the end of 5,700. But, as an objective of a corrective pullback, I’m leaning towards 5,300 closer to 5,000, (followed by a) rebound afterward, “he said.
If the index breaks below 6,000 to 5,750 once again, Barredo has advised investors to stand back and wait for 5,300 to 5,010 for next support zones.
In past crises, Lee-Tan said it would have been impossible to see the peso strengthening against the US dollar or interest rates declining, instead of spiking.
Follow and join us on Youtube, Instagram, Facebook, and Twitter to be part of the trader community in Asia