BDO Securities Corp., the brokerage firm of BDO Unibank Inc., advised investors to consider the ghost month as an opportunity to go bargain-hunting and not to shy away from the market.
BDO Securities assistant vice president and head of online sales John Michael Raz said in a statement investment decisions should be based on sound research, diversification and long-term goals.
The ghost month, which happens every first lunar day of the 7th lunar month, is often associated with cautious behaviors and superstitions that supposedly affect financial markets.
Raz said the 30-stock Philippine Stock Exchange index generally exhibited weakness in the month of August, which happens 60 percent of the time.
“While historically weak, investors should take it as an opportunity to buy the dips and initiate positions in their favorite stocks. For a lot of investors, they see weakness as an opportunity to even improve their cost,” he said,
Raz said financial and power sectors as well as conglomerates have growth potential.
“We continue to prefer the financials sector on the back of still healthy loan growth and improving lending margins. We are also bullish on the power sector which is seen to benefit from inelastic power demand and higher spot market prices,” he said.
“We also like conglomerates with consumer-centric portfolios that benefit from the country’s economic resilience,” Raz said.
BDO Securities said investors could still register decent gains during a down or flat market.
“For active investors who like trading, a flat market offers an opportunity to trade in and out of a well-established range—buying near support and selling at or near resistance. A down market doesn’t mean no opportunities to make decent returns. Rather, you just need to be more selective of the stocks to buy and manage your expectations in terms of returns,” Raz said.
BDO’s brokerage arm expects the benchmark index to end the year at 7,700 level based on an average earnings growth estimate of 15 percent.