The Philippine stock market has recently been trending sideways amid COVID-19, but the stock brokerage arm of the Bank of the Philippine Islands (BPI), BPI Securities, sees potential in companies involved in telecommunications and supermarkets, as these provide essential services to people in the middle of the enhanced community quarantine (ECQ).
For BPI Securities, there are a lot of companies whose earnings and businesses are affected by the ECQ. Telecommunication companies and supermarket chains, however, are holding up much better.
“Within the Philippine context, you would want to buy companies that sell staple items that benefit slightly from this work-from-home arrangement. So the companies that we think fit the bill include some of the supermarket chains. I think telcos, given that they have the broadband business, would be good stocks to own as well,” BPI Securities President Haj Narvaez said.
He added that looking for companies that will be resilient despite the slumping economic activity will likely be larger, well-diversified conglomerates aside from the telcos and certain consumer stocks.
And if potential investors miss the first move in buying stocks, they can buy at the support level, or when they break above the resistance. Of course, it is also important to cut losses when the decision to buy turns out to be ill-timed.
“The second quarter picture is going to be quite bad for most companies, but I believe some of these stocks I mentioned would be able to weather the storm a bit better than other companies that have been severely impacted by the pandemic and ECQ, such as restaurants, companies in the tourism industry, and even property companies.”
While the choices are few because most of the companies in the Philippine Stock Exchange Index are impacted by the lockdown, BPI Securities advised investors to continue to observe the market and look for up-trending stocks, or stocks that show some resilience, despite the down-trending market.
Before the global health crisis brought on by the coronavirus disease, BPI Securities saw a positive trading outlook for 2020.
BPI also posted webinars to teach the basics of stock market investments.
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